How to Reach Financial Freedom Faster with “Slow and Steady” Investing

Does real estate investingShe had the flips, the followers, and the financial freedom. But behind closed doors, she was unraveling. Today’s guest built a seven figure real estate business that nearly lost herself inside it.And in today’s episode, our guest, lake adha shares how she traded burnout for balance and why her new book Return on Real Estate might be the blueprint you need.Well, obviously Tony can’t match my drama, but this is the Real Estate Ricky podcast. And I’m Ashley Kehr,And I am Tony J Robinson with no drama in my name. But let’s give a big warm welcome to Laika. Thanks for joining us today.Hi guys. It’s always such a pleasure to talk to you both because we walk away and I’m like, I learned so much from you too. So thank you for bringing it every episode for so many years.Truly appreciate it. We always love having you on the podcast, and today we are having you on to talk about your new book. It is called Return on Real Estate, so thank you so much for joining us.Thank you for having me. This book has been such a labor of love, but I have written it and I’m done with it and I’m so excited to just bring it out into the world and have everyoneElse read it. Can you take us back to the peak of your hustle era? What did those days look like forYou? Honestly, those were some extremely, now looking back, extremely hard challenging days because I would wake up and then I would just have to start putting out fires and then my day continued that way until I went to bed. And so there was no rhyme, no reason, no calendar. It was just like go, go, go and be dragged in different directions, not have a clear vision or goal. And so it was just a lot of helter skelter, but I feel like that’s what most entrepreneurs go through because there’s no roadmap, there’s no boss, there’s no team telling you this is how we’re going to do this, or this is the direction something has to go in. You are wearing all those hats and just trying to figure it out. And given that no one’s been in your shoes, in that location, in that deal, in that situation, it’s you that needs to figure it out. You that needs to kind of create that pathway one step at a time. And so it was a lot of figuring it out.How did you measure success at that time?By the number of deals that I bought, not by how they did or performed financially, how there were no KPIs just based on how many deals am I buying and that’s going to basically catapult me to success. That was the mindsetDuring this time period, you also have a family. Maybe give us a little insight as to what it was like raising a family, being a mom, and also hustling.Back then I only had one son and I was actually pregnant with my second. So it was challenging because the whole reason I quit my corporate job was to go and be a mom and just be more flexible, have more time for the family. And so when I started working in real estate and I started buying all these deals, I just had no time. So I did the opposite of what I had first set out to do. And also at that time, there was a year, this was 2015, I bought 11 deals in 11 parts of the city and none of them were close to each other. And I was like eight months pregnant, just driving from one house to the next one contractor messed up to the next. I don’t ever want to go back there and I don’t want anyone else to go back there.I think there’s something to be said because I feel like just our culture really promotes this idea of hustling. And while I think there’s definitely some validity in the idea that you have to hustle, you have to work hard, that is a requirement for being successful. I think where a lot of folks struggle, myself included, is how do you strike that balance or maybe draw that line where the hustle becomes counterproductive, right? Sometimes you can hustle so much that you’re just hustling in a million different directions, but making very little progress. So you feel incredibly busy, you feel incredibly overwhelmed, but you’re not making a lot of progress. Was there a moment for you, Laika, where you maybe realized that you had gotten to that point?Yeah, I honestly truly believe that the hustle needs to be there. No one person can set out and say, I’m going to do X, Y, and Z, and then make all the profit that they set out to make not encounter any problems or have to deal with hurdles along the way. So if you don’t put in that hustle and have that experience on all the things that can actually go wrong, you don’t know how to make that right for years to come. So I think people have to put in that hustle, learn for themselves, what works for them, what doesn’t work for them, and how they deal with adversity when it shows up. Because I started with a class of 200 investors here in Seattle and out of that class, two of us still flip homes 11 years later. And so what happened to the other 1 99 people?
There’s so much to be said for, okay, I’m going to hustle, I’m going to encounter all these problems, but then I’m going to show up and figure them out, and then when I move forward, I’m going to look back and say how not to do something or what did I do wrong that I’m never going to do again? And so for me, I think back when I was buying all those deals and I had 11 duds out of 11 deals, you guys, I’m not joking, I probably made a hundred K profit total. I walked away from that year and I said, okay, how can I completely change my idea, my strategy, myself, to never to do that again? And since then I have made a hundred K profit on each deal at the minimum. And I think just having that adversity and learning from it was what helped me grow.So what were some of the things that when you had that realization that you started to implement, so if someone’s listening and maybe it’s not even in real estate, just even at their job or something where they’re feeling that burnout, they’re feeling like they’re not succeeding, what are some of the first steps you took to change your life and change that trajectory you were on?I love that question, Ashley. I think most people feel like they need to be good at everything. And early on I realized that I wasn’t good at door knocking and I wasn’t good at direct mail marketing to sellers, and so I decided to just eliminate that from my business. I said, okay, I am really good at having conversations and networking with like-minded people, and so that’s what I’m going to focus on next. Even deal underwriting, it was going to take me a lot of underwriting to get to the point where I could underwrite deals more realistically, because what I was doing in the beginning was just building out these castles in the air. Oh, interest rates are going to be lower at that point. Oh, my contractor is going to come in at a lower budget than what is recommended by a real estate broker.
Oh, I am going to have all these buyers just dying to buy my property. And so I think just taking a more realistic approach and almost underwriting in a very conventional manner really truly helped me. But that doesn’t mean that you have to go the other way and say, okay, I’m not ever going to make money on this deal because then you’re just going to let go of a lot of really good deals. So it was finding that good balance, finding the right team, this is so important and it doesn’t happen right off the bat, and if it does, you’re really lucky and hold onto your team. But I had to go through 20 different contractors to actually find one team that works for me and now they’ve stuck with me for eight years. And so that took a good three years to build up. And so just focusing on different aspects and then knowing your strength and playing to your strengths and then outsourcing or hiring out everything else helped me minimize how many different directions I was being pulled in, but also focus on what I was really good at.And I appreciate you sharing that because I feel that a lot of rookies do feel that they have to be experts in everything. And I’ve showed on the podcast before that I’m not a DIY guy. I don’t change my own flooring, I don’t install anything. We’ll build the furniture, we’ll put all thatStuffIn. You’re too pretty for that, Tony. That’s right. There’s actually this one time when we were in Colorado together, we went to our friend’s work site and Sarah made this reel where it was like the girl’s like, that’s your man. I think it was like Dr. Phil or something, and it’s like Dr. Phil’s voice, and he is like, that’s your man. And she’s like, yep. And it was me as Dr. Phil pointing at Tony just sitting there and there’s our friend there actually working on the floor. It’s still doing these things.You also have to go deep into the archives and find that one. But it is there. My wife publicly shaming me. But I share that because for a while I felt like I wasn’t a good enough real estate investor because I didn’t DIY, right? Because I didn’t know how to do that. Ignoring the fact that I was good at other parts of the business. I was good at analyzing, I was good at managing projects, I was good at raising capital, I was good at this and that. But because I was missing this one piece, I almost questioned, am I really a real estate investor if I’m not doing all of it? So for all of the rookies that are listening from what lake is sharing it is that it’s okay for you to specialize in certain parts as long as you supplement those other areas with other experts who can do it better than you can. I appreciate you sharing that Laika, but I want to go back because you talked about the money and 11 deals you made a hundred k, that’s like 10 grand a little over per deal,And these are million dollar deals, by the way.And even just the risk associated with that, right? Imagine the risk of taking down almost a seven figure flip to make $10,000. That’s a lot for little, but I guess you mentioned that even when you started making more money, you were still feeling behind. So why weren’t you feeling like a success? Even as money started to increase?I did feel like I was still doing a little with a lot. And so till I actually whittled it down to doing a lot with a little, I feel like I didn’t feel like it was a success because what happened also was I got really good at flipping homes. So then I was like, I like learning curves, so let me go learn to subdivide a lot or let me go learn to build new construction or let me go learn to be a real estate broker. And so then you get back in that cycle of having to learn, build a team, find what you’re good at, find what you’re not good at, and then edit and then repurpose and then move forward. So I just feel like it takes a while to just find your rhythm, find what you’re good at, and then continue to do that for eternity.
But having said that, I can tell you this, I bought a deal just last year that is 10 years in that I would’ve never bought before. And I’m like, why did I do that? I went against my judgment, and that deal has just been so painful, and the only reason that I’m able to get it to the finish line is because of the network and the net worth and the community that I have today. But if it was a rookie that had done that deal, they would’ve been in a hot mess right now. So we still make those mistakes because I still take risks and that’s just who I am. I like taking risks and I like making something out of nothing, but at least I am cushioned. So if you don’t have that cushion, you’re just starting outBe more cautious. So it wasn’t one particular project, what Leica calls the Flip that broker, but that everything finally cracked at this point. So we’ll get into what happened right after Word from today’s show sponsor. So Leika has painted the picture for us of the nonstop hustle, but Leika, in your book, you point out one flip that pushed you over the edge and how this was actually the turning point for you. So tell us about that flip and what made this one different or even unbearable.Okay. So I would say going back to at this point, I had flipped almost 40 homes, so this was flip number 39, and you would think by the time I’ve done 39 flips, I know a thing or two about buying the right deal or in the right neighborhood. And that’s what I thought I did. I bought a house in one of the most premium neighborhoods in Seattle around Seattle called Kirkland, and there was this brand new hotshot outdoor mall that was coming up down the street from where this house was, but it was a 900 square foot home. There were two bedrooms upstairs and they were both tiny where the roof line was literally not very high. And then we bought it, and there was a whole thing with my city where there was an Amazon head tax that went into place, and then people just stopped buying homes.
A, they stopped buying homes. And then B, we got stuck with a really the permitting and then the inspections on this house. It was a 900 square foot house and we did 39 inspections. The inspector was just on our case. It was awful. He kept making us redo work where we were already grandfathered in because we bought the house that way. And so it was just really a tough culmination of things. And then with the fact that people just stopped buying deals, I ended up losing 65 grand on this 900 square foot home. And at that point I was like, oh my God, why me? Right? Everyone feels that way. Why am I buying the bad deals? It’s coming out of it. I realized that I had kind of leveraged my portfolio in a way where I was doing one risky deal for every three really good deals, like home run deals.
And so it was okay to make a loss because that’s the cost of doing business. But again, I’m going to say this, if you’re just doing that one risky deal or if you’re just banking on that one deal to get you out of or to make you all the money you need to make in the year, a lot could go wrong because so much hinges on that one deal. And so I would say when you are underwriting deals over-leverage, do two or three. If you think you can afford a million dollar deal, do two or three smaller deals like three, 400 k deals, even if you have to go outside the city or whatever. But especially when you’re starting out and you don’t have all the other pieces figured out, it is so important to manage your business. And although that deal didn’t break me, it made me question why I was doing this.And just one follow up to that, you say it made you question why you were doing this. How did you come up with an answer to that? Because I think we all reached that point as real estate investors. We were like, damn, is this really what I signed up for? So what was your inner dialogue coming out of that deal?So that night, I’m not joking. That night I was having dinner and we had ordered Chinese takeout and I got a fortune cookie. I hate fortune cookies, but I opened this. I felt like eating something sweet, and so I opened this fortune cookie and it said, you are meant to be in real estate. Shut up. Stop it. I am not even joking. If you go down on my Instagram somewhere in 2017, I posted this photo of my fortune cookie and I was like, what? I still feel like hot flashes thinking about it like what in the world? It was a sign from God saying, you have to be doing what you’re doing because at some point you’re going to get over the hurdle, right?Okay, me and Tony are going to be together tomorrow night, Tony, we’re ordering Chinese food and we’re going to open those fortune cookies and see what they say.That must’ve been like the local realtor who’s trying to promote their business through the Fortune cookiesWas on the back and the other side.That’s a crazy one.That’s actually a great marketing ideaInside the Fortune cookies, right? Yeah.I should get like, oh my gosh, I’m listing my flip next week. I should just take the address and put in every fortune cookie possible and be like, you need to go buy thisHouse. You need to go buy this house or just offer them if you do an open house. So when people crack it, be like where you are is where you were meant to be or something, not directly saying by this house, but that is incredible. Whatever the street number is, if it’s like 3 8 2 or whatever, be like 3 8, 2 is your lucky number,So you get this sign from the Universe Lake that you should continue to do this. But I guess what did that moment, what did that deal teach you about identity as a real estate investor and what you wanted out of it?I think I had accomplished quite a bit by then. I had already done 39 deals and I was like, okay, if I can just continue to go forward and not look back and instead just be positive about this, don’t be doom and gloom and just think about all the good things that can come out of this and my experience thus far, then it doesn’t matter if one deal is a dud, I can still continue to do this. And now looking back, I have done 60 plus deals after that. I have sold millions of almost a hundred million dollars of real estate since that year, and I’ve been on a TV show, I just launched the book. All those things could not have been possible if I had quit back then.I think that I definitely have those moments too where I’m calling home and saying, list it all. We’re selling it all. I’m done. I just think like, oh God, wouldn’t that be so nice? Just selling all. But then I think of the actual work that you have to actually go through to sell a house, coordinate with the tenants, get it listed for sale, deal with the showings, all of that, and it’s like, nevermind, I’ll just keep doing what I’m doing. I’m a pretty lazy investor, but lake along this way, you did kind mention some of your mindset shifts that came in. So you talked about maybe what were those changes when you had that mindset shift to really be your return to intentionAs an investor, even as an entrepreneur, I think you have to constantly talk yourself off the ledge, but you also have to constantly talk yourself to just jump off the ledge and then open your parachute on the way down. So it’s been like I talk to myself all the time, I’m like, okay, this is fine. This went wrong, but this is what I did to overcome that. The other mindset I would say is so important is that you have to crush all obstacles and just keep moving forward. It has to be one day at a time. Yes, today’s a bad day. I have to deal with all of this stuff that’s going on, but tomorrow is a new day. And so the more hurdles you can solve each day, you’re going to get to that bright sun. If you think about it, the last three years from 22 to 25 has been the worst since I started in this business.
Interest rates have been high, buyers have vanished. So any house you put on the market, you have to list right under the actual selling price that you want. You want to be super conservative on your rehabs. You can’t go and shine up the house like I typically do and spend 150 K over my rehab budget. Everything has to be so measured and so perfect, and then find the right sellers to work with, find the right buyers to work with, find buy the right deals. There’s so much that has gone on the last three years that has kind of switched again how I run my business. And so you just have to constantly, you have to be flexible. Don’t be over leveraged. Make sure you have enough capital or waste, raise that capital and then build a community. I cannot even insist moreLike our, I appreciate you sharing that. And we’re actually bringing on James and Thatin, two of the probably most experienced real estate investors that I know to specifically talk about investing through the ups and downs in the different cycles because they’ve seen plenty in their experience. But I think what you just said hit the last couple of years have been some of the hardest in real estate ever. The people who make it through this will be so much better on the other side, and the people who start in this are going to be, I think, even better than the people who are around in the years prior to. It’s almost think about the people who grew up during the Great Depression, that generation had a level of financial maturity and just like, Hey, we’re going to save everything that we can because we’ve seen how bad it is that the next generations didn’t have to worry about.
So I think the investors going through today, they’ll be better for it if they can make it through, and I appreciate you sharing that, and I think that’s why it’s so important. And we joked earlier about today’s episode not being too negative, but I feel that there’s value in sharing the hurdles and the obstacles because when you go to social media and you’re on TikTok, Instagram, wherever you pick your poison, a lot of it is just the good stuff, and it always makes it seem like everything is perfect. And I think that can make it difficult for people who are looking to get started because they’re like, well, man, I don’t have it all figured out the way that Tony and Laika and Ashley do. I can’t do it the same way that they can. But when we share these moments, I think it humanizes the journey of being a real estate investor. And it shows that even the three of us, with whatever level of success that we’ve had, we’re still it out for ourselves as well.That’s why Tony and I will do our goal setting for the year or whatever, and every year, I know when we do the end of the year, where did you end up? My thing is completely different than what I set my goal on because, and it is not shiny object syndrome, it’s that I am so conservative with my investing so conservative and I have not scaled or grown as much as other investors that I know because I am so risk adverse and so conservative. And for a long time that was very hard for me. As I’m not growing and scaling enough, I need to be doing more. I need to be doing more. But I also haven’t had a terrible, terrible deal either. So there are benefits to not scaling and growing or trying to do too much at once. And even if you don’t get to that point of all these units, all these deals, there is still, I want to say a benefit to building a slow and steady portfolio. And it took me a really long time to realize that is that you don’t always have to be the fastest. You don’t always have to do the most deals or have the most properties. You can be successful. And I had the same feeling as you. I am doing everything. I am making money, but I don’t feel like I’m successful yet. And you have to really define within yourself what you think success means to you to really figure that out.So how does Lake operate today and what’s like after you stop grinding it all out? So we’ll talk Peace, profit and Laker’s, new blueprint for building a business with Eased right after a quick break. Alright, so you’ve shared how burnout forced you to redefine everything, but now let’s step into today. So how do you run your flipping business differently today than you did on Flip 39 or those other earlier deals that were maybe giving you some issues?Yeah, I think today I just want to focus on what brings me joy. And so if it’s doing a flip and that brings me joy, then that’s what I want to do. If it’s working with a certain investor and they bring me joy and they inspire me to be a better broker or better investor, then that’s what I want to do. I don’t want to do something. I’m not crazy about the learning curves anymore. I’ve done it. I’ve been there, I’ve seen it all. So I’m like, okay. Even when I raised capital before I was like, oh my gosh, I just need money for this deal. Today I’m more intentional about, I don’t want to work with that investor, so I’m not going to raise money there, or I actually really like this one individual and I want to see them grow, and so that’s whose money I’m going to take.
So it’s more of a holistic approach also to both of your points. I think a lot of people have, they throw so much weight on what other people are doing on social media, and I’ve never been a fan of just run with the masses, do what everybody else is doing. So my whole thing has always been very measured. And because you brought up James, Dana, I’ll tell you this, James, I’m very lucky in the same market as James and Thatch and big, big investors. And so we do just have good hallway conversations about work, about life, about business. And one thing that James and I always talk about is your social media, yes, will drive you a following, but it’s not going to drive you to money. The money you make, the financial freedom you can get is by the work you put in. So you can do all these fun things you can go and speak on at meetups and you can go attend conferences, you can listen to podcasts and read books, but ultimately you have to take action.
And we have a lot of friends that are doing all these other things but not really taking much action, which means that they’re not financially, they’re still struggling. And so for us, I think it’s always been about, okay, we have to put in the work. So go underwrite the deals, still learn about the market, go find those deals, buy from amazing wholesalers that just know how to get the right properties under contract and then run your crews so that you’re not burning them out and they have your back. And then ultimately all of that is what leads to a paycheck. So just imagine all the things you have to go through to get a paycheck. So while the social media is great for raising capital and all of that, I think that’ll all come as a byproduct to the actual experience thatYou have. So how has your relationship with money changed since really leaving the hustle? How are you measuring wealth now? Is it in terms of freedom or is it still the profit?Yeah, I mean, I think it’s the time freedom. I just came back from a 60 day trip around the world and I was able to do that because I have good systems in place. I set up my business in a way that I can work from anywhere. While I was gone, I was able to sell four properties to two of my investors, get one of my buyers into their forever home, sell two of my flips, and I can do that because of all my systems that are in place at the same time. Don’t get me wrong, you do need money. Money is what moves the world and you need money. I need money to put my kids to private school. I need money to pay all my mortgages that my tenants are not paying right now. So you do need the capital, but I feel like that has to be a byproduct of you doing everything you love before and then when you get so dependent and so over-leveraged that you have to make a paycheck, that’s when you start doing the wrong things. Like just raising capital for the sake of raising capital, not really having an exit to how you’re going to pay your lenders back or not being able to pay your monthly debt, or you just don’t want to be in that position where you can’t dig yourself outOf it. The more desperate you are, the more miserable you will be. That will be the outcome is because you will partner with anybody. You will take anybody’s money, you will do any job, and you’ll be more miserable because you aren’t aligning yourself with what matters. And your whole point of being able to choose who you partner with that is part of your wealth creation. And at first you may have to be desperate as to who you partner with and different jobs you take and stuff. It may not be the ideal situation, but if those are things to get you started and in that hustle period, but always be intentional of Lakers focus as to that’s not the end goal is to just work hard to create the life you want so you can be intentional about who you work with and what you do, and it will drastically change your life more than the money will that you’ll be able to make those decisions and you’ll be in control of having those options.Before we wrap things up here, we talked about this a little bit at the top of the episode, but what made you feel that now was the right time to write your book Return on Real Estate?I think it was just the place I was in. I felt like I had enough of the experience, I had seen enough of the investing cycle to be able to not just talk about my experiences because the book, this is what I love about the book is that it’s full of stories, like real life stories of things that happened to me that truly are unbelievable. So it was just really nice to write about those, but also marrying that with truly technical ways and steps you can take to accomplish something. It honestly took a really long time to just organize the way that I wanted the book to feel, come up with all the different chapters I wanted to touch on. So that took a long time. And then to actually execute on the writing, I was just so excited that I was able to do it. It took a long time. It was like a year in writing and it was exhausting, but I just really enjoy the way that the book turned out and I really hope that it helps a lot of people because if I can do it, I swear anyone else can do it. So that’s what I wanted to show through the book is go get ’em.Well, we were honestly really hoping that your answer would be that you opened a fortune cookie and it said to write a book, but that’s a great answer. Also has the reasoning. But yes, everyone should definitely check out Lekas book. Where can they find it? Leika, go to the BiggerPockets storeRight now and preorder your book. You can also go on Amazon. If you do go on Amazon, please don’t forget to leave me a review. The only way you can is if you buy a book through Amazon. So those are your two channels to go buy a book. And if you are in Seattle, come to my launch. It’s on September 18th,Tony, I believe you have a discount code for the book if anyone buys it directly through the BiggerPockets bookstore. What is it?Well, Ashley, I’m so glad you asked because I definitely do have a code for the audience. So if you use Code Ashley Tin or Tony Tin, just pick whichever host you like more. You can use that code, but you’ll get 10% off the book.Well, thank you so much for joining us. Where else can people reach out to you?You can join me on my Instagram or I’m a big, big fan of everyone having a LinkedIn profile, so go on my LinkedIn again. It’s LeDta. Okay, great. Thank you so much. I’m Ashley. He’s Tony. And we’ll see you guys on the next episode of Real Estate Rookie.