Do you want to know how to create more cash flow from your real estate exponentially? In this episode, Monick Halm interviews Paula Brooks, real estate investor goddess extraordinaire and Principal at Financial Freedom Faster, to discuss ways to achieve this. Paula achieved financial freedom in just three years by investing in shared housing for young professionals. She talks about her own property niche and introduces you to other creative niches that investors all over the world are adapting to multiply cash flow from their properties. Paula further shares insights about managing her properties, working hands-free, and attaining financial freedom faster.

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Listen to the podcast here:

Multiply Your Cash Flow Through Division – Interview With Paula Brooks

I have a special guest to interview. Paula Brooks is going to talk to us about how you can multiply your cashflow and get exponentially more cashflow from your real estate through the vision. She’s a Real Estate Investor Goddess extraordinaire from the UK. She achieved financial freedom in three years by investing in shared housing for a young professional. She’s going to talk to us about her own property niche and tell us some stories about other investors that have had similar results through using niches and dividing up their property. She’s been collecting their stories for a book that she’s writing on Financial Freedom Faster. She’s going to share all that yummy, juicy insights with us. I’m happy to have her. Welcome, Paula.

Monick, how are you?

I’m great. I’m happy to have you here.

It’s an honor. Thank you.

The honor is mine. I have many questions for you, but let’s start at the beginning. How did you get started in real estate investing?

That was several years ago. I bought my first one in 2008 but a couple of years before that, I was given that little purple book. I’m one of those purple book stories, the Rich Dad Poor Dad by Robert Kiyosaki. My sister who was in the US at the time gave me that book to read. She said, “This might be of interest to you.” Once I read that, it was I had that paradigm shift, a lightbulb moment that people do.

I get it. I got mine too from the purple book.

There we go. Purple book sisters.

I met Paula at a cruise, The Real Estate Guys Investor Summit at Sea, where Robert Kiyosaki was. He’s a frequent guest speaker on the cruise so he was there. That’s where I met Paula and got to hear her inspiring story. That’s why I’m particularly excited to have her here. You’ve got the book and in 2008, you bought your first house. What did you do then? Paula is in Belize.

It took me a couple of years to get that first house. When I read Rich Dad Poor Dad, I was working as a flight attendant in the UK and my husband had a good job in the City of London. We lived in Wales, so he commuted every week. I had a weekend husband, which was okay. We had two nice cars on the driveway, three ponies in the field, the big house in the country, which was all nice but once I read Kiyosaki’s book, I realized I was well intruded in the rat race. If he’d have lost his job, we would probably not have been able to keep that house. He would have had to get another job quickly and he’s not getting any younger.

You started looking and finally found one.

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I started to try and get into real estate. I didn’t know what to do. I had no previous experience at all. They were offering redundancy in my workplace. I decided to take that. I had a little full pot of cash, to begin with, and went to work as a realtor. I thought that’s how people learn and can see the side of things. I did that for a couple of years but still hadn’t bought that first one. The numbers weren’t right or sexy enough for me. I couldn’t decide on an area. I’d never been a landlord. I had many fears and I didn’t know anything about it. It was only then when I found Rich Dad Education. I did some courses with them. Eight weeks after doing my first three-day course with them, I had an offer accepted on my first multi-lectured house. That fast-tracked me then.

This is where it gets particularly interesting. What did you do with that house? This is what’s unique about how you’re investing?

It’s cool. I take a single-family home. It can be two or three stories and what I do is I may take one of the bedrooms upstairs and divide that up. It’s particularly the large master bedroom, or I’ll take some of the living space downstairs and create maybe 1 or 2 bedrooms from that. There’s a living space or a living room, plus the kitchen and a couple of bathrooms. What I do is I rent the rooms out separately to young professionals. These are white-collar workers. They tend to come in around the 21 to 27-year-old, straight from university in their first or second jobs. They don’t particularly want to go back to mom and dad or they might be new to the area. We keep the rents nice and affordable for them. We pay all the utility bills and property taxes so when they come in, it’s one rent check that goes out. They don’t have to worry about chasing anyone for rent or any of that housemates so anything. It works well.

Let’s talk to us a little bit about how does it multiply the cashflow?

I’ll think of one in my head that I’ve got. It would normally rent out to a family. I would rent that out at £650 per calendar month. If I rent out to young professionals by the room, depending on the size of the room, I’m getting between £380 and £420 per room. That’s a five-bedroom house so that’s how it multiplies.

That’s £380 to £420 per room, you’re getting upwards of £2,000 a month instead of £650.

That’s it. It’s affordable for them.

This is good for them because it’s more affordable than if they were to get their own place. It works for you because you’re able to get exponentially more for the same property. I love it. What inspired you to do this to go after young professionals? How did this idea come to you?

When I was doing the education, it was one of the models that were being taught. It is called an HMO or House of Multiple Occupation in the UK. It’s similar to student houses. They pretty much were teaching student houses. One of the tutors there was renting it out to young professionals and that’s what piqued my ears up. That’s what I decided to do. I learn from somebody else.

That’s how you do it. You get educated and you take action. I love it. You have these houses and you have more than one, at this point. You’ve leveraged that. There are a lot of questions I have about that. One is, you are in Belize. You’ve been traveling the globe to work on a book. How is your management set up for your properties so you have this type of freedom?

As I grew my portfolio, when you’ve got 2 or 3 of these types of houses, they’re quite easily managed. You haven’t got one family, instead, you’ve got 5 or 6 tenants in there. Immediately, it becomes a lot more management intensive. Once I got to about 3 to 4 houses, I thought, “This isn’t how I planned it.” I did want to learn the business so I was looking after the first few for myself. What I did is I set up a management company myself with my business partner who was my sister. She was one that had given me the book. We did our courses together and she was buying similar properties as well. We set up the management company and looks after the portfolio for both of us and other investors because we were acquiring this type of property for other investors as well. That all fed the management company. It means that I’m pretty much hands-free and can go wherever I want. That was always the goal when we set it up.

 

It’s pretty passive income. It sounds like you are syndicating. You’re getting other investors together to help you continue to buy houses.

I was doing that. We’d be looking to do that when I get back into the UK. The reason I’m here in Belize is, I’ve been investing. I’ve noticed there’s been lots of different ideas around different real estate niches. The people that I’ve seen have been doing amazing different business models increase and multiply the cashflow. I call it the Divide to Multiply Concept. You divide up a property or piece of land to multiply the cashflow from it. I found that the people that have been doing that have exponentially grown their income faster than the average single-family home route.

You’ve been going around the world interviewing these people, these other investors?

Yes. These are people I’ve met and know because of the places I’ve been to. For example, the Investor’s Summit at Sea with The Real Estate Guys, I’ve been on a lot for several years, so I’ve met many people through that internationally. It’s been amazing. I feel that other people need to hear their stories and what they’ve done. Also, to give people the ideas because sometimes, I’ve also noticed that people are a little bit put off. They’re thinking about the property but don’t want to have 50 or 100 single-family homes. It’s 100 rooms, ACs, boilers and all those issues with it. I found many different ideas out there that you don’t need many of these houses you see.

What are some of the different niches that these investors you’ve been interviewing are doing?

I did several interviews in the UK. That consisted of renting an apartment out by the night. That was taking advantage of the Airbnb model. My friend, Joe, does that and he doesn’t even own the house that he rents out. He’s got several of them, but he doesn’t even own them. That’s a great model for people that are starting with no cashflow. He doesn’t even have to buy the property. I’ve got a great guy as well who’s doing asset stripping with farmland in Wales where I’m from. He’s doing an amazing job. On his first deal, he created £126,000, and his latest he created £8 million from. They’re big numbers.

What is asset stripping? I don’t even know what that is.

That’s where you take a large amount of, for example, farmland that’s going to move acreage to it. Maybe one farmhouse with some outbuildings. What you do is you purchase it as a whole and you strip off the farmland element of it, leaving the farmhouse and outbuildings with a few acres. It means the people that have been looking for a farmhouse, usually equestrian type people that want a place for a few horses. They don’t want all the farmland. He then sells off the farmland separately. The outbuildings he gets planning permission on. He sells them and the farmhouse separately. He buys it as one and sells it in three different units.

What are some of the other ones?

We’ve got all about the students’ accommodation. That was amazing from going from a few student homes to purpose-built student accommodation. We’ve got Josh and Lisa Lannon. I went to San Antonio in Texas and what they’re doing is they have a rehabilitation center. They started off small, but already they’ve got a 500-acre ranch in Texas. They are catering to the first responders who are suffering from PTSD. They are serving those who served us. It was amazing, Monick. It was an amazing place to be. The social purpose that they have is amazing.

All of these are providing a service, helping solve problems for people, and being able to get a lot more money by doing it that way.

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It’s solving problems. It’s who do you serve. There are many different ways of serving people and solving problems.

I had heard before about the student housing model and the assisted living facility model, which is for older people or seniors that need help with day-to-day living. I’d also heard of Airbnb but not necessarily doing it with other people’s properties. All of these ideas are brilliant. I know you’re going to have a lot more in your book. For this book, you had a working title. What’s the book called when it comes out?

It’s a working title, but it will probably be called Financial Freedom Faster. It’ll be out there for people to read and possibly take action once the children are back in school and life becomes normal after the summer holidays too. We’ll get back into more of a routine. That’s the timescale for you.

We’ll be looking out for it. You had mentioned that several people in the book had to get over the issue of not having the money to invest. You mentioned one way in which somebody was able to get in this game without having any money. The person with the Airbnb that they’re managing for others. What are some other ways that people found around not having the money?

There are many different stories. Everyone’s got their own story about it, but most of them didn’t have the cash to get started with. What they needed to do was network and find another investor that did have the cash. They would find a deal and the investor would come in with them and they’d somehow share the deal in some way that benefited both of them. There are all sorts of creative ways of doing that like using credit cards for the refurbishment. That’s good as long as you’re using them for good debt, not bad debt, that’s an easy route out. Especially if you’re going to refinance something, because you’d be able to get the money back out when you refinance it. You can pay any debt down to either debt that you’ve loaned on a card, a family member or an investor. That’s a creative way.

This reminded me of what Tony Robbins says, “There’s no lack of resources. It’s only a lack of resourcefulness.” If people are resourceful, there is always a way. How about finding confidence? What helped you find the confidence to get started and to do it?

I had no confidence to do this at all when I started. I thought, “I know nothing.” It came down to education for me because I still haven’t bought that first house until I found the education. After years into it, I’m still not buying the first house. I was fearful and cautious. This was the hard-earned money that I was going to be buying something with. I wanted to make sure it was right, that’s why I’m sharing all the different business models with people. Once I had the right business model, I could relate to that type of tenants. I had two daughters who are growing up. I liked that business model and that type of tenant, the young professional. It’s something I could relate to.

That’s another thing I’ve noticed from the interviews in the book. Quite often, people will choose one of these business models because they related to it in some shape or form. I was talking about Joe, who was renting out apartments by night. He and his wife were in hospitality previously. It goes over into that. Josh and Lisa Lannon had issues with drug addiction so they knew the market. For the farmland, Kevin was a farmer before that. It’s something that people didn’t have to go too far out to their comfort zone to relate to the different business models. The confidence comes with the education that you receive and the networking as well. There’s so much education out there. Once you find it, it gives you confidence because you’re learning from other people. They’re almost giving you a blueprint to follow and you’re learning from the mistakes.

I’m all about education, which is what Real Estate Goddesses is all about. It was smart. People shouldn’t invest until they have an idea of what they’re doing. If you were to go in and don’t quite know what you were doing, you might have lost some money. If you are educated, understand the market, you have a business plan that you can follow and mentors, that will give you confidence. It’s well-earned confidence because you know what you’re doing at that point. That’s great and smart. What advice would you give to a woman who’s starting out in real estate investment? Maybe where you were after you read Rich Dad, Poor Dad, or somebody who’s thinking, “I want to invest. What should I do?”

I would use other people. You can use other people’s money, but also you can use other people’s knowledge and time as well. I know when I first started, I was a bit fearful about talking to builders and things like that because it’s quite a man’s world out there. Men tend to be pre-programmed to help ladies so we can use that to our advantage. Don’t be afraid to ask the builders. When you learn the different trades and respect what they’re doing, you also learn to speak their language. As soon as you start speaking their language, then they suddenly realize it and respect you.

In fact, this was quite funny. I had a builder come to the house for something on our own residential property. He walked straight in and started talking to my husband straight away. It’s me that deals with all the property stuff. He started talking to him. He’s going on and on. My husband was looking at him with wide eyes. He said, “You need to speak to my wife.” The builder turns to me as if to say, “Really?” We then started having a conversation. He went from this speaking to a housewife type person who he thought I was. They focus on you and it’s fine. It’s easy getting the language and being confident that it comes. It’s a learning curve, but it does come.

 

Thank you, Paula. Let’s end with a quick trinity. A trinity is a brag, gratitude and a desire. What are you celebrating? What are you bragging about?

I am celebrating this amazing adventure I’ve been on. I’ve done so much since I’ve been away from home. I’ve been horseback riding on Southfork Ranch in Dallas. I’ve been on a beautiful rooftop pool in Panama City. I’ve been invited to radio and podcast events. I’ve been swimming with the sharks here in Belize. It’s been amazing. I am celebrating getting the interviews done and being here. I am going from planning all this on a piece of paper to compiling the book. I’m celebrating that. It’s been an amazing journey.

What are you grateful for?

I am grateful for all the interviewees taking time out from their busy schedules for me. They’ve been inspiring. The giving back that they do have been emotional. I’ve cried in some of these interviews. I’ve had tears in my eyes. They’re amazing people. I love them. I’m grateful for them giving up their time and I can’t wait to share their stories with others.

What do you desire?

I desire to always have choices in my life. The choice of what I want to do, where I want to do it and who I want to do it with. A friend of mine, Jean, who’s one of the interviewees. I was in one of his assisted living facilities. I went there to visit and it’s an amazing place. They’ve got residents there who are about 85 upwards. I walked in and it was an amazing environment, but it struck me that life stopped. Being in the presence of those people I’m aware of and hoping that they had done what they wanted with their lives, who they wanted to be with, and what they’d wanted to do. I’m hoping that they have that peace with them in that final place, that wonderful place. That’s what financial freedom can give you at any age.

It’s great that you are around helping people find financial freedom faster. It’s exciting. I can’t wait to see the book. Where can people get in touch with you and find out more about you, what you’re doing, and find out when the book is out? What’s the best way?

We’ve put out a Facebook page. It’s Financial Freedom Faster, so it should be quite easy to see. The posts will be going out there, so I’ll be sharing my journey, thoughts, some of the snippets from the interviews and the ideas from people that I’ve met. That’s all coming. That’s starting to come out because I’ve created so much content. It’s going to be nice to be able to get it out for everyone. People can message me through that. That’s fine. That’s no problem at all.

Thank you so much. This was amazing. I’m excited to have that. I’m inspired. I want to try it myself.

You’re welcome

Everyone, thank you for coming. See you next time.

Thank you, Monick.

Thank you.

Important Links:

• Paula Brooks
• Rich Dad Poor Dad
• The Real Estate Guys Investor Summit
• Rich Dad Education
• Josh and Lisa Lannon
• Financial Freedom Faster – Facebook Page