Do you think it’s not possible to have financial freedom in real estate as a single mother? Monick Halm’s guest today is Mandy McAllister, a multifamily real estate investor, mindset ninja, and eternal learner. Mandy shares with Monick how her first deal was a fourplex, and she was scared to death of it. But afterward, she had a thousand dollars cash flow. Once she got past her fear, she began to accelerate her growth towards financial freedom. All of those while being a single mom! Tune in and conquer your fears! Learn the ways Mandy found financial freedom through syndication.
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Finding Financial Freedom Through Syndications With Mandy McAllister
I am super excited to have with me Mandy McAllister, who is a multifamily real estate investor. She calls herself a mindset ninja and she will tell us more about it. She’s an internal learner, coach and dot connector. Her passion is to help others define their path to financial freedom through syndications, coaching and her platform inspiring women to achieve more. Like me, she has the heart to help other women that she considers her soul sister. I’m super excited to have her with me. Welcome, Mandy.
I could not be more excited to be on the line with you here, Monick. Thank you for the invitation.
Before we started rolling and recording, you were talking that you’re about to retire from your job. That long ago, you were a trader so you were not in the real estate space. How did you get started in real estate investing?
This journey of must-be a real estate investor has started when I was nineteen years old. I was at a party on a friend’s porch in college. She was explaining how her dad bought the house. She rented out the rooms to our friends. I’m like, “You get to keep that money. That’s the best idea I’ve ever heard in my whole life.” That was where the seed was planted of must-be real estate investors. I then moved from that small school in Georgia to Chicago, which is a cost-prohibitive market. I ended up following everybody’s advice, doing all the right things, going through the whole career, getting the degrees and all of those hoops. I didn’t end up buying anything for the express purpose of investment until 2016 when I was 35. Nineteen to thirty-five was a lot of thinking, wishing and inaction but since 2016, I’ve hit a spot where I don’t need my day job anymore. A little bit of focused effort goes a long way.
What finally got you to take action and tell us what was your first deal?
My very first deal was a fourplex. I was scared to death of it. My reason for doing it and my son was born in 2016 as well. My thought was, “I’ll buy this little fourplex next to a college regardless if he goes to that college or not. I’ll have it paid off in fifteen less than eighteen years.” I’ll then put a new loan on it then that bucket of money is going to be tax-free because it’s a new loan. That’s his college fund. That was the reason. We’re not in a dress rehearsal life is happening baby was born type-thing but also, I still had this thing in the back of my head that, “What if this goes wrong? What if the toilet breaks?” All of that fear stuff that everybody, lots of people especially women have to get in their way.
Contracts save your pocketbook and your relationships. Share on XI took the deal with someone who’d done a lot of deals and I said, “This is what I’m thinking of doing.” That person was like, “That’s a deal I do, for sure. I do it six days and twice on Sunday.” I did that deal. I realized, “I didn’t die at the end of it.” Not only that, I had a $1,000 cashflow. An asset would be paid off and not that many years. That accelerated my focus in a big way. For me, once I got past that fear-thing, it’s a muscle. It became significantly easier to deal with in subsequent transactions.
You do this and you’re thinking, “I’ll do this one fourplex that will be the college fund.” What got you to, “Let me keep going until I have 250-something.” What got you from that one fourplex to where you are?
Largely, it was because, in my life and my community, I’m the only one who sought this stuff out. I never saw these examples of, “It is possible.” You hear these stories of, “Someone in this far-off land is making this financial freedom thing happen.” When I was friends with people who are retiring from their jobs in their 40s and 30s, it’s like we were saying before, “If you can see it, you can be it.” One thing I love about these types of conversations and maybe getting a chance to be that example for somebody else because I’m a single mom to a five-year-old little guy. I’ve figured out the money now that I can go live my life.
You are doing this all as a single mom. For those of you reading who are like, “I can’t do this because it’s just me.” It is possible. You can. You were sharing that you’re closing on something. What are you working on?
Right now, with all of this economic uncertainty that we’re in, I’ve pivoted from focuses on syndications where that business plan in the PPM is very precise. We’re going to refinance in year two, we’re going to sell in year five and you have to thread that needle in order to reach those projected returns that you have for your couple of dozen investors. I’ve pivoted and worked more on smaller multi. These 50-ish unit size deals and we do joint ventures. The deal we’re closing on now is a 47 unit that it’s me and five other guys, that we’re buying in Northwest Indiana. I live in Chicago so it’s close-ish.
Financial Freedom: Once you get past your fear, it’s easier to deal with later transactions.
Another thing, “There’s nothing in my backyard Chicago is so cost-prohibitive.” Two hours away, there’s a state that knows what they’re doing in terms of governing, in my opinion. There are deals to be had that make way more financial sense and where growth is happening in GDP, in jobs and in population. This 47 unit we bought vacant out of receivership. Receivership for newbies is basically foreclosure for the big stuff. We’re going to put into it more than we’re paying for the asset. It’s going to be cool and it’s going to change that community. We’re pretty excited. It’s a heavy lift. I’ve never been part of something that’s heavy of a lift but I’m excited about that too.
You’ve never been part of any of that. Why this for you?
I feel like the market’s super hot. That’s undeniable. You got to go where the opportunity is and I have been super keen on this heavy of a list years ago, certainly not because there were a lot of value-adds. You put new door handles on and you can increase rents by $200. Those existed years ago. Now, this conversation of value-add multifamily has been happening at a high level for a really long time now. You got to look where the opportunity is and for me, the partnership is everything. Being partners with people I can trust, people I can learn from because of the guys that I’m partnering with on this deal, I learn something every time I’m around them so that is why this right now.
The partnership is so important but having the wrong partners has been one of the mistakes that I’ve done. It’s not good. What would you say was your biggest mistake and what did you learn from it?
A mess-up partnership. I trusted someone I shouldn’t have trusted. That’s probably in everything. If we’re going on a therapy session, the thing I do wrong most in my life is I overtrust too quickly. Now, I do a background search on every single person who’s my partner. You know what happens if something weird comes up that, “I see you filed bankruptcy in 2008. We need to have that hard conversation.” That’s just a couple of things. There might be a good reason. There might be a story of growth involved in that hard conversation but it allows me a couple of things because in terms of the partnership, friendship, relationship, everything with joint ventures. It’s easy to have good communication when everything’s hunky-dory.
If you’re returning a 12% cash on cash, that’s an easy conversation to have but when it hits the fan and you have to deliver bad news or have a hard conversation about something that’s not positive, that’s where you know if you have a good connection, relationship or not. I think that the background search that I do has yielded some good, hard conversations with some of my partners but it’s for a good reason. I’ll tell you too, basically the partnership gone wrong. I lost a big chunk of money. There are lots of lessons in that. I’m only ever wiring money ever to a title company ever again. Do you know what I mean? I went to church with this man. Our children played together. I thought it was like a level of trust beyond what I should have trusted but it did and here I am. I still haven’t gotten the money.
It does help, no matter how close you are to do things right. Have contracts in place. Go through the formalities because it tends to not save your pocketbook but save relationships too.
The closer you are and the more obvious that we should trust each other, it is. If money is involved, the more important than the contractual thing is.
What are you most proud of?
The one thing in my life that I have won is the kindness of my kid. He’s so funny, Monick. If I win nothing else, I hope I give him the building blocks to living a full life.
That does say something about you, that you have a wonderful child. To what do you attribute your success?
I grew up on a farm in a town of 800 people. Most of the people who were there that’s where they stay. I always ask the question, “Why not?” I played volleyball forever and I wanted to play Division 1 Volleyball. That was the big thing. I always thought, “No, I’m only 5’9. I only jumped touch 9’6. There are all these bigger schools and better players.” One time my mom asked me, “All of those teams need players so why not you?”. “Why not me? They need the players anyway. Why shouldn’t I be one of them?“ The same thing in trading, I was the only female trader in 180 trader firm. Medical device sales it’s difficult to get into and why not me? I can speak the medical vernacular. I started undergrad in Chemistry. This investing thing should be hard but I can do hard things so why not me?
You fail your way to success. Share on XWe talked at the beginning about you being a mindset ninja. That’s a great example of that mindset reframing. What do you mean by mindset other than the ninja moves?
I’ve learned to work on myself and figuring out how to get through the stuff that is not the best part of me. That fear stuff that we talked about with the fourplex. I always have a little trick of how can I look at something a little differently. When something feels insurmountable or I can’t get past through or what is too hard in that moment. I try to reframe it in such a way that it’s easier to approach. For instance, when I get to a point of fear that, “I can’t do this fourplex.”
It was a whole new learning thing when I did my first 50 or something unit that, “This stoic philosophy idea of what is the very worst that could happen?” Even the same thing in leaving my day job, “What is the worst that could happen?” I know I have enough cashflow coming in to cover my stuff worst-case scenario but I think through what is the very worst thing. I get to that very granular, not like, “A pipe will burst and one of this bill comes in.” No, what is the very rock bottom worst thing that could happen in a situation then how do you approach that? In leaving my day job, if the very worst rock bottom thing is that all of that cashflow somehow goes away and a lot of things hit the fan. I’ll go get another sales job. I know I can do that.
In the 53 unit, we took that down at the beginning of COVID when we didn’t know what was happening with all of the renters and job loss and whatever. I realized like most of the people losing their jobs in COVID were bartenders and manicurists. These service industry-type folks and the people who kept their jobs were like nurses, police officers and computer programmers, people who had those types of jobs. What I did is I went to the property manager and asked for all the applications to see what their job was on the application and I was able to say, “At-risk job, not an at-risk job.”
In my head, we had done the breakeven point that the economic vacancy could be up to like 42% or 43% before we wouldn’t be able to pay our bills. It turned out that like 10% of the people who lived in our building had these non-essential jobs. The worst-case scenario with 10% of our people lost their jobs and we chose to move forward. Ninja in that mindset type way is like, “How can I reposition what that problem is to deal with it in a different way?”
What advice do you have for a woman who’s starting out in this field?
Eighty percent of anything is where your head’s at, your mind is at. Twenty percent is the mechanics. If you’re high-performing women, you were like the perfect little girl who did all the extra credit. You sat down, raised your hand and you followed all the rules, understand the taking risks the failing. You fail your way to success. If you’re a perfect little girl, you don’t know how to be okay with failure. That failure is learning and falling forward into what’s next. Understand and embrace that failure is the path to growth. It is the path to success.
You don’t success your way to success. You fail your way to success. You fall your way to success. You mistake your way to success. You course correct. You get feedback and course corrections that will help you to get there. What do you wish you’d known at the beginning that you now know?
That I can trust myself. That my intuition is good. That if something feels off because I trusted the guy, the partner too much, something felt weird about it. I knew that and I continued to push forward anyway because I knew I should trust. There’s no way he would rake me over the coals if we have this or whatever. If your intuition is good, you have to learn how to hone it. You have to learn how to pay attention to it, to understand it and how to work with it because he ain’t going to work against it.
I believe in teaching because our woman’s intuition is our most valuable tool.
It’s our leg up. It’s the reason that women are better investors than men. If you look at CEOs of Fortune 500 companies, their earnings targets, the women’s earning targets aren’t as wildly divergent but they deliver more frequently. Women deliver more frequently. We are better investors than men and we don’t trust ourselves because they’re big talkers sometimes. You and I plan in this multifamily world and lots of guys will be like, “I got 10,000 units.” You’re only 0.02% of those 10,000 units. Let’s ground truth this and understand why we are doing big things and we should trust ourselves.
Financial Freedom: When something feels insurmountable, try to reframe it, so it’s easier to approach.
Mandy, before we get into our famed end of show trinity, which is a brag, gratitude and a desire, how can people connect with you and find out more about what you do.
The easiest way to get ahold of me is MandyMcAllister.com. There you’ll find information on Good Fortune Capital, which is my investing firm and also inspiring women on achieving more, which is our inspirational women’s free stuff that we do.
It’s now time for our trinity. What are you celebrating right now? What’s your brag?
I am celebrating these few days from leaving my day job. I am letting go of the branch. I am trusting myself. I am betting on myself and making that happen.
What is one thing you are grateful for?
You are better and stronger because of the hard decisions you made. Share on XI’m grateful for all of the hard things that have brought me to where I’m at now. I’ve had a couple of hard years. I know everybody has a 2020 hard year but I made some hard decisions and I’m a stronger and a better version of myself for it.
Last but not least, what is one thing you desire?
I’m going to have a net worth of $10 million several years from now. Speak it into existence and it will happen.
So shall it be or so much better than you can imagine under grace and in a perfect place. Thank you so much, Mandy. That was awesome. You can connect with Mandy at MandyMcAllister.com and inspiring women, achieving more. You can connect with me at REIGoddesses.com. There you find out about our programs or events. Connect to our amazing community of women from all over the world, investing and supporting one another. Please subscribe, like and follow this and join us next time for another incredible episode. Bye-bye.
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About Mandy McAllister
Mandy McAllister is a multifamily real estate investor, mindset ninja, eternal learner, coach, and dot connector.
Her passion is to help others define their path to financial freedom through syndications, coaching, and her platform, Aspiring Women Achieving More.
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