BIO: Jennifer Murtland is a licensed Real estate agent and investor in Ohio and Northern KY. She is the co-host of the Real Estate Fight Club podcast that focuses on battling through residential real estate topics.
STORY: Jennifer bought a 200-year-old patchwork house on a whim, and it ended up sucking up all her money and time in renovations and repairs.
LEARNING: Be careful when buying a patchwork house because it will cost you a lot more in the long run. Choose your tenants wisely to lower your risk and protect your return on investment.
“Have different budgets for renovations based on the age of the house. The older the house, the more money you’ll need.”
Jennifer Murtland is a licensed Real estate agent and investor in Ohio and Northern KY. She started her real estate career wholesaling pre-foreclosures and investing in rentals. She is the co-host of the Real Estate Fight Club podcast that focuses on battling through residential real estate topics. She is a no bull shit, passionate professional who is committed to her client’s success and is currently looking for real estate agents to join her company.
Worst investment ever
Jennifer started wholesaling pre-foreclosures. In 2008 there were a lot of pre-foreclosures coming with good deals as houses were cheap then.
The 200-year-old patchwork house
In 2010 Jennifer came across a six-unit building that was almost 200 years old. The house was a patchwork house. Originally, it was a two-story house that probably started as a single house and then had two add ons built on, making it a six-unit apartment building. It literally looked like a patchwork quilt.
Ignoring the facts right in front of her
Jennifer knew that buying a patchwork house was a considerable risk. She, however, believed that she is savvy and good with math, and this purchase seemed to make sense where numbers were concerned. So she bought this property.
The domino effect
As expected of a 200-year-old home patched together when one tiny thing goes wrong, 100 other things go wrong. The repairs were not cheap either. Everything would cost like $3,000 to $10,000. But the average rents were about $500. As if that was not enough, the only tenants Jennifer could get were a pimp, a drug dealer, and a wife-beater; it was such a disaster.
Getting rid of the patchwork
Finally, the market turned, and about three years ago, Jennifer talked to her partner about the house, and they decided to sell the property. She found somebody and held the financing, and luckily the buyer paid Jennifer every month. Then the buyer sold it to somebody else, and Jennifer got her money back.
Be careful when buying a patchwork house
The thing with old properties is when one thing goes wrong, 10 other things will go wrong, and it’s never cheap. So when doing your budget, keep age in mind. If it’s a newer home, you won’t need a lot of money for renovation, but the renovation budget could triple if it’s an older home.
Do your due diligence to preempt any trouble with your purchase
When you’re buying anything, keep in mind that the seller is probably hiding everything they possibly can on what’s wrong. So expect that the seller will hide stuff and do your due diligence to uncover what they are hiding.
Investing in stocks is more straightforward than real estate
Investing in stocks is so easy compared to real estate. You just buy, if you don’t like it, you sell it the next day.
If you’re going to invest in real estate, there’s a lot of ways that you can make money; being a landlord is just one of them. If you decide to be a landlord, be strategic about the tenants you target. This will dictate where you buy, which will dictate your return.
No. 1 goal for the next 12 months
Jennifer’s number one goal for the next 12 months is to have 35 agents join her international real estate company.
“Don’t be emotional. Check your numbers or have somebody else check your numbers.”
Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win in investing, you must take risks, but to win big, you've got to reduce it. And I bet you're exposed to investment risks right now to reduce it, go to my worst investment ever.com and download the risk reduction checklist I've made specifically for you my podcast listeners based on the lessons I've learned from all of my guests, fellow risk takers, this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guest, Jennifer Merlin. Jennifer, are you ready to rock?
I think so, Andrew.
Andrew Stotz 00:45
Well, I'm excited to have you on the show. Let me introduce you. I'm going to introduce you to the audience. So ladies and gentlemen, Jennifer Merton is a licensed real estate agent and investor in Ohio and Northern Kentucky. She started her real estate career, wholesaling, pre foreclosures and investing in rentals. She is the co host of The Real Estate Fight Club podcast that focuses on battling through residential real estate topics. She's a no bullshit passionate professional who is committed to her clients success, and is currently looking for real estate agents to join her company. Jennifer, take a minute affiliate for the tidbits about your life.
Jennifer Murtland 01:31
Well, Andrew, I think most people find it interesting that I was able to travel the world for a year while running my residential real estate business pre COVID. So that was exciting. I love traveling so much. So my favorite places are Mexico City. And my least favorite is Kyoto, Japan. Which people Heckle me for.
Jennifer Murtland 01:57
Because it's the worst. And then my second worst place is Santiago, Chile, because I got tear gas by the police twice. It was awful.
Andrew Stotz 02:10
Okay, that doesn't sound very fun.
No, it was awful. avoid it, isn't it? Isn't it
Andrew Stotz 02:15
kind of amazing that you know what someone one person thinks is their best place and the other person thinks is that worst place? No,
Jennifer Murtland 02:22
it's true. It's true. But there's a lot of great places in the world, just not Japan or Chile. And and just out of curiosity, you know, I
Andrew Stotz 02:33
mean, that's ultimately it's the dream of most people is to be able to have a business that's running, generating income while you're, you know, traipsing about the world how much work was involved when you were away? Were you like, four hours a day, emailing and doing all that? or What were you doing?
Jennifer Murtland 02:51
four to five hours a day I worked. So I was coming off of working probably like, easily 12 hour days and just burnt out and I had to I was so burnt out. I had to leave the country for a year. And people have said you can't do it. There's no way but I did it. We sold over 50 houses that year while I was gone, which is residential real estate.
Andrew Stotz 03:14
That's not and you had like a team in place, or you were working with agents or you're
Jennifer Murtland 03:19
like, there's only two of us on our team. Yep. But yeah, I mean, he and even before I left, he was like the main one that would go and do the realtor stuff. Like go and do the listings and buyers and things like that. And I was on the cold caller of our group. So it made easy. I just had to work a lie. Oh hours, huh? Yeah.
Andrew Stotz 03:43
Yeah, and just one last thing before we get into it. I love the design of the relative Fight Club podcast. And you know, thanks. I think it's really cool when you've got you've been doing a lot of episodes I've seen like your friend list their home as an FSBO and some other recent episodes, maybe just tell us because I think you know, there's plenty of people out there that would like to learn more about real estate and tell us you know, what they're going to get when they come to your podcast.
Jennifer Murtland 04:14
So the podcast is well we haven't changed our name we were realtor Fight Club. But then the National Association of Realtors sent me a nice cease and desist to not use the word realtor. Which was my goal. Because then that's how you know you're known I figure if you don't get in trouble at least once a day or so then you're not pushing the envelope, you know, so we changed it to real estate bike club, and what it's for residential realtors, and we talked about, like topics like showed your buyers send a letter with their offer. And then we also do ethics and professional violations at the board and we talked about those cases to see
Andrew Stotz 05:00
So it's really fun, huh? That's exciting. All right, well, we do find you do fight
Jennifer Murtland 05:07
about it because my co host is more Yeah, like, I'm more like a no bullshitter direct to the point and she's like a lot nicer. She's got soft, softer edges. I'm hostile,
Andrew Stotz 05:19
hostile, hostile. Alright, well, speaking of hostile, now it's time to share your worst investment ever. And since no one ever goes into their worst investment, thinking it will be. Tell us a bit about the circumstances leading up to it, then tell us your story.
Jennifer Murtland 05:36
All right. So this was why had a lot to choose from because I'm like your classic high emotion. Get excited, don't do due diligence type person, how many passionate is what I like to call it. And so we were wholesaling pre foreclosures. And this was 2008 when there was a lot of pre foreclosures. And there was a lot of good deals, you know, like houses were going for not a lot of money. And it seemed like the numbers worked, you know, and I bought this, I was mostly buying single families about some poor families, but I wanted to get something bigger. So I ran across the six unit building, which technically is considered commercial. It was a This house was probably, it was like, almost 200 years old. And it was like a patchwork house. Like, I think that originally it was a two story house that probably started off as like one single house. And then it had like two add ons built on. So it ended up being a six unit apartment building. It had three separate entrances. I mean, it looked like a patchwork quilt, basically. But like, you know, I'm like think I'm savvy, and I like think I'm good at math. And I was like, what could go wrong? I mean,
that is the kiss of death.
Jennifer Murtland 07:00
The second you tell yourself, what can go wrong, everything does. So we bought this property. It was 2010. We actually just sold it last week, actually. So we bought the property is 2010. And it was okay. But as 200 year old homes are, that are patched together when one tiny thing goes wrong. 100 other things go wrong, and it is never small. Like there's no straight edge. Like when the pipe burst. It's like the entire plumbing stack is under the ground all the way to the street like a $10,000 fix. When you get a tenant, it's like it's a haunted house. So the only tenants I could get was like, I got a pimp. I got a drug dealer. And this was in a nice part of town. It wasn't like a bad part. It wasn't like a red zone. You know what I mean? Like I had a guy that was like a wife beater. I mean, I had a hoarder. The police were like, is this a halfway house? I was like, you would think it was money if I could have it funded by the city. You know what I mean? That's what probably what I should do. But it was like a disaster. Like I was just writing checks, like, every second and they weren't small checks. Like everything was like a 3000 or $10,000 mistake. Like it was never 100 bucks. But the average rents were like $500. I mean, it was insanity. That gives me a headache. But finally, we, the market turned. And a few how many years ago was that? Now, maybe three years ago, I told my partner who's my mom. And I was like, we need to sell this property. Like now. Like Now is the time to sell this property because of the market. And she agreed I found somebody we held the financing. So we were owner financing. And luckily he paid us every month. And then he just sold it to somebody else. So we got our money back.
I was like, Oh, wow.
Jennifer Murtland 09:17
I mean, obviously not all the money we spent like we didn't lose like everything but it was a disaster. Oh, it was awful.
Andrew Stotz 09:24
And when you when you look at the total period of time, you know was it did it ended up being a loss because of all that you had to spend
Jennifer Murtland 09:34
a loss. So we were trying to like mitigate our loss. You know what I mean? It just like I could never get a good tenant there. Like I could never get anything fixed properly. It was just like everything was a disaster. Like the whole time. It was a disaster. It was it gave me a headache.
Andrew Stotz 09:52
I said so tell us what did you learn from this?
Jennifer Murtland 09:56
Do not buy a patchwork house is what I learned. We have a lot of old properties in Cincinnati. The thing about like old properties is, like I said, when one thing goes wrong, it's like 10, things go wrong. And it's never cheap. So now when I do my analysis, I have different budgets for the based on the age of the house. So like, if it's a newer home, I won't budget as much renovation, like over the years. And if it's an older home, I'll just triple what I think because like, that's what it is.
Andrew Stotz 10:32
And now And would that be the main thing that you miss? You know, in your, in your excitement over the house is that you just didn't?
Jennifer Murtland 10:39
I didn't budget enough? Yeah, we bought it, we bought it too high. And we didn't budget enough costs for the expenses. I mean, it was just too high. The ceilings were too high, like there was no straight lines of plumbing zol every I mean, everything's old. Not easy. Nothing is easy in an old house.
Andrew Stotz 11:02
So let me share a few things related to this story. The first one is you bring me back. When I was when I was in 1983. I was graduating from high school. And I had I had, I had basically had just come out of three different rehabs in Ohio and some the final one in Ohio. And Mom said, Look, it's great that you're sober. But it's time for you to start to prepare to get out on your own. And so I was 17. I was in turn 18 in July. And it was like June when I graduated high school. And then, you know, I found a place to rent. And it was a patchwork house.
Andrew Stotz 11:46
Yeah, and I now of course, I had no money. I was just reading a little room in there. And it was all for the kitchen. Yeah. I was a recovering alcoholic, I could help you with the halfway house aspect. So, but I can remember, when I had to pack up some stuff from my hat, my room and my parents house, and my dad drove me there to drop it off and all that and I got into that house, and I just I fell on my knees and cried. I mean, I was so I said it was such a hard time. I mean, you know, on one hand, it was like exhilarating that I was going to be free and be able to do whatever I wanted. But on the other hand, it was like the closing of a chapter and all I got for was this $120 a month room. And it was just so weird. I mean, like my, my, one of the roommates like, tried to lock me in my room, you know, like, padlock. I don't know, it was just like, weird. And then another one, like, started a fight. And next thing you know, I'm in a fight in the house. And then I don't have any money, I'm working in a factory that's like an hour away, and I'm writing a little moped, and then boom, I get a hit, got hit by a car, and hurt my knee. And then is like, and I had to go get food stamps. And then I went to church nearby to get you know, food and all that it's like, is, but the one thing that I always remember about that time, though, was because I was sober, I was going out to 12 step meetings every night with my friends, my old friends that were all getting sober, and also new friends. And I was totally happy. You know, I mean, it was a Happy, happy, happy time. And it reminded me that it always reminds me, and this is the lesson out of that is that even in our darkest hour, just remember that I can always remember that there was a time when I had nothing. And I have happiness. And so the point is, is that, you know, they say, you know, money buys happiness or money can buy happiness, and whatever money is neutral to me. Happiness come from inside. And that's always a reminder. And there's a couple of other takeaways. The first one is that, you know, investing in stocks is so easy compared to real estate. Yeah, you just buy you don't like it, you sell it the next day.
Jennifer Murtland 14:05
Yeah, like you have the problem with investing in real estate is that if you're going to also like be a buy and hold and be a landlord, you have to have a lot of people skills, and especially if you're going to be doing like lower income housing, because when there's one problem, it's exponential across the light their lives, right, like when the car breaks down, or they have no money to fix the car. It's not just the car. That's the problem. And a lot of times, people that grew up in that type of environment don't have a lot of like conflict resolution skills or skills that can they can think about, like how can I resolve this issue? It's just a problem. And so now as the landlord, it sort of becomes your problem, too. Yeah, and that that's one of the biggest lessons I learned from having some of these properties. Now I only have properties that, like our I call them like work force properties. So these are people that make an average income, you know, maybe like 80 to 120% of the average income, right? Because those people understand how to fix problems, typically, we're doing business together, if they own their own business, or they've been customers of mine, or something like that. So now my return on my investment is lower. But my return on time and sanity is like exponentially higher.
Andrew Stotz 15:41
Well, and in the world of finance, we would say your risk adjusted return is probably better, even though your return may be lower, but your risk may be significantly lower. And that risk can also be the time, the time sink. And the last thing that I would say that I would take away is that, you know, ladies and gentlemen, when you're buying anything, just remember, the seller is probably hiding everything they possibly can of what's wrong. Right? Right. So it's like everything. And so it's like, with a patchwork house, it just shows up that, you know, they've just they've kept it together, you know, yeah, barely patching every little thing up knowing that if anybody touches that one little thing, this whole thing is going to fall down. And they're going to hide all of that. Yeah, in the process. And that's the, that's the point of due diligence, and all of that stuff. So those are the three things that I take away. Number one, it reminded me of the time when I lived in a patchwork house. Number two, I felt like stocks are easy compared to being you know, really involved in real estate to that level. And then, finally, is the idea that sellers are going to hide and just expect that they're going to hide stuff. And your job is to find it and uncover
Jennifer Murtland 16:56
anything you add to this day, the there's four furnaces, and well two boilers and a twin furnace in that building. The twin furnace is literally duct taped together. And it has been since before I bought it in 2010.
Andrew Stotz 17:16
Yes, your first giveaway is when you walk through the house and you see duct tape.
Andrew Stotz 17:24
Alright, so based upon what you've learned from this, and what you've continued to learn, what one action would you recommend our listeners take to avoid suffering the same fate?
Jennifer Murtland 17:35
I think like you, I think that I want the listeners to know that you really have to take a look at yourself. And if you're going to invest in real estate, you have, there's a lot of ways that you can make money in real estate, being a landlord is just one of them. And if you decide to do that, really look and say, okay, who do I want my tenants to be? And then that will dictate where you buy, which will dictate your return.
Andrew Stotz 18:00
Great, great advice. And I think remember, ladies and gentlemen, that being a landlord is a business,
Jennifer Murtland 18:07
you're better off having like, if you just have one, I wouldn't do it, you need like 10 or more, in order for it to really maybe a little less, but like give or take, right. But like more than a couple for it to really make sense. Because it's just not gonna work. If you only have like a couple. It's not, it's not worth it.
Andrew Stotz 18:28
That's super valuable advice. I did an academic paper A while ago, when I was writing some academic stuff. And I came up with the title of that paper was 10 stocks are enough in Asia, meaning if you're going to invest in stocks, you know, you should invest in about 10. If you invest in any less, you're taking on way more risks than you need to number one. But then the amount of if you take on more than 10, you might as well just own the whole stock market. Yeah, and just own an index fund and don't go through the hassle of own that. But I think the same it's great advice. Number one, because of diversification. So if you bought 10 units in different parts of town or different types, that gives you some diversification. But also, you've got to generate a serious, reasonably high enough amount of revenue to offset the operating costs of running the business of being a landlord. And so there is a economies of scale, you know, aspect of your 10 advice.
Andrew Stotz 19:30
Yeah, you're right. Exciting. Well, I think I learned a lot today. Well, last question. What's your number one goal for the next 12 months.
Jennifer Murtland 19:38
Our number one goal is to have 35 agents join our it's called our company is called ESP and our team is called team synergy and we're International. And so we're looking for agents to join us the right agents. You know, of course, I've learned a lot of lessons that way too. That's the one I
should have told you
Jennifer Murtland 19:58
about those investments. agents have a lot of lessons
Andrew Stotz 20:03
there. Well, that may be episode number two. All right, well, listen. And I think that you were telling me that the best way for people to get in touch with you if you're interested in learning more, but also becoming an agent is your phone number. Yeah. And that is one plus 1-513-400-1691. And I'll have it in the show notes. So you can contact her through both WhatsApp or text message or call. Fantastic. Well, listeners, there you have it another story of loss to keep you winning. My number one goal for the next 12 months is to help you my listeners, reduce risk in your life. So go to my worst investment ever.com right now, and download the risk reduction checklist and see how you measure up. As we conclude, Jennifer, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status returning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?
Just don't be emotional.
Jennifer Murtland 21:19
Check your numbers. Have somebody else check your numbers. That's my last words. Beautiful.
Andrew Stotz 21:24
And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.
Connect with Jennifer Murtland
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points