#034 How Valerie Clark escaped the rat race with passive income.
On this episode of House Flip Masters Holly is joined by guest Valerie Clark. Valerie has escaped the rat race through investing in real estate. Valerie is based in Southern California where she does most of her real estate deals.
Before Valerie got into real estate she worked in marketing for 20 years and when it was over she decided that she wanted to be self employed and knew she wanted to get into real estate - when she got into real estate she knew that she wanted to stay in and that’s where she finds herself today. Valerie says that real estate had always been a passion of hers and she’s glad she got out of the rat race and now employs herself.
When asked about her first deal Valerie says that she started very early by purchasing in her hometown of Hermosa Beach, California. Valerie recalls that this lot was a dump that it had an ocean view - she even recounts that she had buyers remorse after purchasing this home. Eventually when Valerie was done living there she split that lot on paper and hired an architect and made plans for 2 units and then she sold the plans.
Around 2000, Valerie was no longer working in marketing and was looking for real estate full time when she came across a building in Long Beach that she liked. When the property was in escrow Valerie again for buyers remorse and admits that she was nervous and scared of the deal and ended up giving away two-thirds of the deal. Valerie says that she doesn’t feel bad about giving any of it away because she knew that she was partnering up with two people who knew what they were doing. The three decided that if after a year things weren’t working out that they would sell the property and go their separate ways and that’s exactly what happened - Valerie walked away from that deal with a $100,000 check. When she inquired about the woman who cut her the check she learned that the person who bought the property from her and the two other partners was making much more money than her $100,00 check Valerie decided that’s what she wanted to get into condo investing. Valerie decided to start research condo investing so that she could start investing in them - after that she bought 2 properties that had 16 units each in Long Beach. After working with condos Valerie dabbled in house flipping until those deals disappeared from the market where she was flipping in. Valerie says that she became desperate for a deal because of the way that the market was going and she said she was bleeding to death looking for a piece of property that would help to pay her bills.
Holly asks Valerie to share what happened when things were not working out for her in Long Beach and Orange County areas before she decided to move to Central California. While Valerie really liked the Long Beach area she had a friend who was a parole officer who mentioned to her that the parole office was looking for housing for parolees - this did not interest Valerie at all, but when her friend told her that the government would pay for this housing she started to think differently about the opportunity being presented to her. Valerie ended up buying a house in Long Beach that qualified for the parameters of the parolees where they could and could not live - she bought the home and fixed it up, as well as furnish it. She recounts that before she could even finish fixing up the home she had 6 people waiting with cash in hand wanting a place to stay. Valerie really got into this area of real estate and continued to buy houses to continue to house parolees, but eventually she ran out of money. When this happened she went to a hard money lender to refinance her house so that she could get another property. When Holly asks how Valerie felt about having parolees as tenants, Valerie says that the people staying at her homes were very respectful and she doesn’t regret doing these deals. After 7 years of housing felons Valerie mentions that she did sell one of her properties to Holly and Holly said that this property has been a very lucrative business for her.
Since moving out of the Orange County area Valerie has found herself in Kern County that she says she currently has more than 10 homes in that area. Valerie says that people are always saying there are no deals in California and complaining that they have to go find deals in Memphis but Valerie says that Kern County is alive and well and keeping her bills paid and her cashflow consistent. Valerie has even created a team where she is able to do all of her deals from the comfort of her home or her car because her team takes care of a lot of her work.
Holly asks Valerie to share a piece of advice for beginners and Valerie confirms that real estate investing is scary and that you cannot just jump into any deal, even though there are deals all over the place, you need to get an education and connect with people who know the business. Valerie encourages relationships; join local clubs and get to know people because those relationships will be extremely helpful in the long run. For a seasoned investor Valerie advises being very strategic with your investing and to diversify your market and to make sure that you have a plan for what’s next on your real estate investing path.