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The financially savvy woman got a chance to chat with Mindy Jensen, co-host of the BiggerPockets Money podcast and co-author of First-Time Home Buyer, The Complete Playbook To Avoiding Rookie Mistakes. Jensen is a licensed real estate agent in Colorado and has been buying and selling homes since 1998. Here we chat about how she got started with real estate investing and how other women can do the same. Jensen is also passionate about financial independence, so we also got her best advice for reaching this milestone.
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How did you come to real estate investment?
I lived with my parents and had finished my studies. A friend was going through a divorce and had rented an apartment but had to give it up. I took over her lease for the remaining months and when it was finished I decided renting was a waste of money and I needed to buy a condo.
I lived in my condo for four years and sold it when I got married because my husband owned a house. I sold the condo for 50% more than I bought it after doing very minor work to make it look nicer. (My first flip!) We remodeled my husband’s house and flipped that too. The best part is that because we live in these homes while we remodel them, they are our primary residence and thanks to the Section 121 exclusion, we don’t pay any capital gains taxes if we sell the home. (You can legally avoid paying taxes on winnings up to $250,000 if you’re single and up to $500,000 if you’re married.)
I’ve expanded into renting by not selling properties immediately after they’re rehabilitated — you can rent them out for up to three years before you sell them and still get Section 121 exclusion. I’ve also branched out into more passive investments like Real estate syndications and partnerships involved.
More: 8 insider tips to get rich in real estate
What advice would you give to other women who want to invest in real estate?
- educate yourself There’s a lot more to it than just buying a home and placing a tenant in it. If you are interested in investing in real estate, start educating yourself about the process as it will take at least 250 to 500 hours of class to become proficient initially – and even then you will make mistakes. BiggerPockets.com is a great place to start. The forum, blog, and podcasts can help you narrow your focus (there are many ways to invest, it’s not just renting!) and track the types of investments that interest you most.
- Don’t be intimidated. Everyone starts not knowing anything. Someone who makes you feel bad about your newbie status isn’t someone you want in your corner anyway. There are countless places to learn – podcasts, websites, meetups, etc. – and so many people willing to help you learn. Yes, there is a big learning curve, but there are so many people willing to help you learn.
- Not every property is a good investment, and there are some properties that do NOT make sense at ANY price. Learn what works and what doesn’t, and don’t offer more than what makes sense for you. It’s easy to get caught up in a bidding war and want to “win,” but you often come up against investors with different goals, motivations, and financial situations. Make the offer that makes sense to you and don’t worry about what other people are doing.
What’s the best financial advice you’ve received on your journey to financial independence?
Get started and make regular deposits into your investment accounts. If your company offers a 401(k) match, do everything in your power to contribute enough to receive the full amount. Do everything in your power to maximize your Roth IRA for as long as possible.
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Jaime Catmull contributed coverage for this article.