Agents Building Cashflow

EP 172: Building Communities Through Strategic Real Estate Investing with Dr. Jennifer Salisbury

• Dr. Jennifer Salisbury

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US Naval Academy graduate and real estate investor, Dr. Jennifer Salisbury, shares her journey from being a nuclear engineer to becoming a successful real estate investor, offering insights into managing properties, and handling tenants. 

She has properties in both the US and Canada and talks about the differences between the US and Canadian real estate markets. She dives into her unique strategies for rental management, emphasizing the importance of building community through thoughtful housing projects. 

Dr. Jennifer’s wisdom covers everything from tenant screening to managing multi-unit developments, making this episode a must-listen for aspiring investors. Stay tuned to hear her game-changing advice on the future of affordable housing!

Key takeaways to listen to:

  • The importance of creating community-driven housing projects.
  • How to develop real estate portfolios by leveraging multi-unit properties over single-family homes.
  • Navigating the complex differences between US and Canadian real estate markets.
  • Using detailed pre-screening methods to avoid costly mistakes when screening tenants.
  • Encouraging long-term tenant retention through thoughtful management and maintenance practices.

About Dr. Jennifer Salisbury

From Maui, Hawaii and British Columbia, Canada, Dr. Jen and her husband Mike are housing providers on both sides of the border.  As a US Naval Academy graduate, she ran reactors as a nuclear propulsion engineer on the USS Enterprise (CVN 65).  Her skill set is very analytical, logical and pragmatic.  In her podcast My Life As a Landlord, Dr. Jen teaches landlords in the US and Canada all about tenant screening, lending practices, cash flow and credit, and so much more. 

Connect with Dr. Jennifer Salisbury:

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To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] Dr. Jennifer Salisbury: But because he had given his word to his partners, that it would be finished and that we would do certain things. And I would tell the employees that and say, look, the only reason we're here is because Mike gave his word. That's it. It's the only reason. If he hadn't given his word, I'd be on the beach right now, swimming with turtles.

[00:00:16] Dr. Jennifer Salisbury: I said, I wouldn't be here with you guys in the heat. And we did it during COVID and we were in masks and steel toed boots and hard hats. I remember pouring the first slab going, Oh my God, we have 15 more slabs to go. This is never going to end.

[00:00:30] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your and turn them into cashflow.

[00:00:50] Intro: Here's your host, Randall. Let's dive in. 

[00:00:54] Randal McLeaird: Hey, welcome back. It's good to have you on today. We're having a conversation with Dr. Jennifer Salisbury. She is a nuclear engineer [00:01:00] and we talk about real estate, whichis great to have someone with that type of mind on the show to see how she handles a lot of the processes and things that they work on.

[00:01:10] Randal McLeaird: A lot of landlording in her background, they're doing development projects. The most recent thing that we were talking about is five acres that they bought in Canadafor an RV park and just her process of working through that. Great conversation. AndI hope you get something out of the show.

[00:01:25] Randal McLeaird: If you would go on rate and review, it helps time to bring out great guests anywhere you listen to podcasts and without further ado, let's jump on, talk to Dr. Jennifer Salisbury. Here we go. Right on. So um, Not sure if you have, the title kind of explains like what we're doing here. I've been a broker for a long time and a real estate investor longer than that.

[00:01:44] Randal McLeaird: And so the whole gist of the show, it's like, Turn your commission into cashflow, go invest and do something like buy some property, do something. It looks like you're well versed in that and have been doing that for a long time.

[00:01:53] Dr. Jennifer Salisbury: I'm excited that you're talking to some of the great people that I've been talking toand about my podcast. The only reason I even started [00:02:00] this podcast was that I had so many people approaching us going, how on earth are you doing rentals in Canada when during COVID you didn't even go back to Canada for three years.

[00:02:10] Dr. Jennifer Salisbury: self managed. I don't have a property manager. And so now I have a team on the ground, right? But there was just so many people approaching us going, how do we do this? How do we avoid bad tenants? How do we set up systems? How do we actually do this? And it was so many questions over multiple years.

[00:02:28] Dr. Jennifer Salisbury: And I just said, should start a YouTube channel. And my daughter said, no, you want to start a podcast, which of course now has spun off into a YouTube channel, ironically. But I speak to both sides of the border because the rules in Canada are not the same as the U S some of them are very different.

[00:02:43] Dr. Jennifer Salisbury: Like Canada doesn't have a 1031 exchange. There's no vehicle to defer capital gains, it's... When you sell a property. That's it. They get their money. 

[00:02:52] Randal McLeaird: Yeah. Period. There's no deferment. I had a retail operatorwho I had on. But it wasn't just the no capital, no sale, [00:03:00] but the debt is different, right?

[00:03:01] Randal McLeaird: It's like a five year term max or something on a floating rate. 

[00:03:04] Dr. Jennifer Salisbury: Yeah it's really interesting in the U. S. you can get a 30 year mortgage locked in and there's no term. That's it. The amortization length is it. And in Canada, they do a term and it's usually it's five years. And the way they do that is Canada avoided the mortgage crisis.

[00:03:21] Dr. Jennifer Salisbury: They really didn't have a mortgage crisis there in 2008, 2009, 10, 11. So one of the things they did was they implemented a stress test. So for any lending institution, they basically do a varying escalation of payments and your cashflow and can your income support this, graduated scale of debt and beyond a contingency, let's say, and then they say, okaymax term is five years.

[00:03:46] Dr. Jennifer Salisbury: And then in five years you must either refinance or, do something, you have to do something. They will not let you hold it long term anymore. 

[00:03:54] Randal McLeaird: This is the private equity side of me thinkingit seems like there would be a big push to have [00:04:00] a third partyfund established from private equity that lends long term money and there'd just be a massive amount of people who want that.

[00:04:09] Dr. Jennifer Salisbury: And there isprivate equity in Canada. So it's highly regulated. Let's see, are there real estate? I T R E I T. I don't remember what the acronym stands for, but it's real 

[00:04:20] Randal McLeaird: estate investment trust. 

[00:04:22] Dr. Jennifer Salisbury: That's it. 

[00:04:23] Randal McLeaird: REIT real estate? 

[00:04:23] Dr. Jennifer Salisbury: Yeah, it's the reit. So they do have REITs in Canada and they're quite expensive, as a person that wants money from a REIT.

[00:04:30] Dr. Jennifer Salisbury: But then they're very highly regulated, right? It's basically a mortgage backed security. That's what it is. Yeah. It is a security. 

[00:04:35] Randal McLeaird: Yeah. Yeah, for sure. Yeah, 

[00:04:36] Dr. Jennifer Salisbury: Interesting how Canada looks at a lot of these things very differently. But yeah, so they've implemented the five year term.

[00:04:43] Dr. Jennifer Salisbury: And so right now what's happening and just even looking in Canada is that you've got people who are still locked into their super low rates, but very soon they're all going to have to refinance to the, five, six, 7 percent rates. Several of our mortgages in Canada are at 6 [00:05:00] percent now and we put them on one year because why not?

[00:05:03] Dr. Jennifer Salisbury: If it's down in one year, Or if it's the same in one year, 

[00:05:07] Randal McLeaird:  Okay. So you're going to do a one year term. Like how muchcost is that adding to your refinance?

[00:05:11] Randal McLeaird: Like when you're doing that, or do you not have that refund finance costs? How does that work? 

[00:05:15] Dr. Jennifer Salisbury: No, I don't. It's so it's not the same as an extension. So if we do a one year. Which is typically what we'll do is a one year closed and go, okay within 60 days, 90 days of that one year, which, happens pretty quickly.

[00:05:28] Dr. Jennifer Salisbury: We're talking nine, 10 months. We go back around and what we've done now is cause we have mortgages and we've actually aligned them all with the same lender, which is ironic. We don't always do it that way, 

[00:05:39] Randal McLeaird: but 

[00:05:39] Dr. Jennifer Salisbury: right now they're all aligned with the same lender. And because we've done this so many times that, okay.

[00:05:44] Dr. Jennifer Salisbury: Everything is aligned to the same renewal period. Before they were all over the year. And so now we're just doing it. But it gives us more power saying, Hey, we're a bigger client. We've got more debt. You've got security on all these properties for a one year, give us a better rate.

[00:05:59] Dr. Jennifer Salisbury: And so [00:06:00] sometimes they will give us a better rate and maybe not for a one year, but for two, three or four. But again, we're looking at this going, okay, there's an election on both sides of the border. There's an election in the U S there's an election in Canada. Lots and lots of stuff happening on not only the federal reserve side, but also the bank of Canada.

[00:06:15] Dr. Jennifer Salisbury: Interest rates and inflation are the talk of the day. And maybe we won't do a one year term next time. Maybe we'll do a four year. But having said that, we're also doing a development of an RV park up in Canada that we are my husband and I create community. That's what we do. And so we're creating a 48 RV park that can quite frankly be turned into a tiny home community because I think that's the next way that we're doing affordable housing.

[00:06:41] Dr. Jennifer Salisbury: Affordable housing is, it cannot be built in my opinion. We can talk more about that. 

[00:06:46] Randal McLeaird: Let's kick off and talk about Just like what you're working. You live in Hawaii. You've been buying it. All 

[00:06:51] Dr. Jennifer Salisbury: right. 

[00:06:52] Randal McLeaird: So you're Canadian.

[00:06:53] Randal McLeaird: Is that what I gather? 

[00:06:55] Dr. Jennifer Salisbury: So I was born American, but then I married a Canadian. 

[00:06:58] Randal McLeaird: All right. 

[00:06:59] Dr. Jennifer Salisbury: And during the [00:07:00] recession, during the 2008 2009 recession, we were living hereon Maui, having gotten married. And we could see there was no work here. There was nothing here. It was like rats jumping off a ship and it was everybody's flocking to the airport.

[00:07:12] Dr. Jennifer Salisbury: Literally, they would just leave their houses and leave. And so we ran to Canada, which is where he's from. He's from British Columbia area. And we went up there and of course I was a complete fish out of water. I had never been to Canada before I met him 18 years ago. And Yeah, so then we ended up staying almost 10 years.

[00:07:34] Dr. Jennifer Salisbury: Give or take eight or nine years and boy, Canadians are funny. They've got different words for things. They're always saying sorry and 

[00:07:44] Randal McLeaird: you 

[00:07:44] Dr. Jennifer Salisbury: pronounce things differently and anyway, they've got their whole little language. 

[00:07:48] Randal McLeaird: Yeah. 

[00:07:49] Dr. Jennifer Salisbury: But yeah, so that's what happened. He had bought a a piece of property in South Maui in 19, 1995 to develop some homes [00:08:00] or some condos or something.

[00:08:02] Dr. Jennifer Salisbury: And in 2015, when the recession started turning around and the economy on Maui started basically had recovered from the recession because it hit Hawaii really hard. The worst part of the recession in Hawaii was actually 2011. So we saw it coming in 2006. 2007, we were already in full recession here, even though it hadn't hit the mainland yet.

[00:08:24] Dr. Jennifer Salisbury: And so remember when economic times are tough, the first thing people do is cancel their vacations. And because tourists industry here is like the main economic driver, it hit here hard. And so anyway, 2015, we ended up coming back to Maui to build out this development and Mike worked on it for a while and they recovered it.

[00:08:46] Dr. Jennifer Salisbury: And then 2018, I jumped in full time when we got our final approvals. And then we've been building that. It took us five years full time, both he and I and it was a grind because he was the general contractor and the developer. [00:09:00] And had we not been there every single day, we would it was tough, Randall, I'll tell you.

[00:09:04] Randal McLeaird: What kind of development was it? 

[00:09:05] Dr. Jennifer Salisbury: Eight fourplexes. So it was luxury condos, class A buildings. And it's called Paradise Ridge. If you want to see it, it's paradiseridgemaui. com. And yeah, it was 42, 000 square foot of living space nine foot ceilings or above. The upper units 

[00:09:19] Randal McLeaird: were called 12 000 square feet of living space on 60, what is that, 32 units?

[00:09:24] Randal McLeaird: Yeah, that's massive. 

[00:09:26] Dr. Jennifer Salisbury: Yeah, half were two bedroom, just 1, 250 square feet, and then the other half were three bedroom, almost 1, 400 square feet. Yeah. Plus the pool house, plus landscaping, plus the retaining walls because it was built basically on blue rock. Yeah. What is 

[00:09:40] Randal McLeaird: blue rock? Is it good or bad?

[00:09:41] Randal McLeaird: Blue rock is, 

[00:09:41] Dr. Jennifer Salisbury: It's a volcano. 

[00:09:42] Randal McLeaird: Okay. Okay. 

[00:09:43] Dr. Jennifer Salisbury: We built it on a volcano. 

[00:09:45] Randal McLeaird: Yeah. All right. I'm like, is it easy to dig through or is it like impossible to dig through? No. 

[00:09:51] Dr. Jennifer Salisbury: We did a lot of hammering and made all the neighbors super mad for a long time, but that was my job was To work with people. So as a [00:10:00] result of that, Mike and I both won awards.

[00:10:02] Dr. Jennifer Salisbury: So we're now award winning real estate investors, which is pretty incredible to say, but it's perseverance. And had we not done what we did, it would still be a field. 

[00:10:12] Randal McLeaird: I always think about that of, biting the bullet. I don't know how that worked out financially for you guys, if it was a big win or if it was like not.

[00:10:20] Randal McLeaird: Huge loss. Yeah, but you take it and you hit the nail on the head there where you have a almost a loss leader, like it. Now you're recognized like you did it. You can talk about it. You have this massive story. You can say things about and you want an award at the back on the back end. I'm curious, would you do that again?

[00:10:38] Randal McLeaird: Or maybe on a smaller scale or let me frame it in the sense of I'm a guy and I want to get into like retail development and, this one deal, it might be my prize it's a sore spot in the city. And if I redo it, I may lose money, but then I'm like, Renowned.

[00:10:54] Randal McLeaird: Okay. Would you recommend that approach as your marketing strategy? 

[00:10:58] Dr. Jennifer Salisbury: When you weigh [00:11:00] out the grief to dollars ratio, you have to include everything that is not on your balance sheet and your income statement, and that includes lost sleep, that includes lost time with kids stress levels when I couldn't get something when we couldn't get a permit or we couldn't get an approval or whatever, I would literally get in my car and go and Do a sit in at the person's office and be pleasant, right?

[00:11:23] Dr. Jennifer Salisbury: Because in this world, as soon as you lose your cool, you've lost. You've lost. And so if the grief to dollars ratio works, in that then I would say do it, but you have to know going in. It's a grind. It's a grind and it is not easy. You've got to put lots of time and effort and attention and you've got to be absolutely fully engaged.

[00:11:48] Dr. Jennifer Salisbury: And as a result of that, do you get credibility? Of course. But do you get money at the end? You might get some money. You might get wages. You might, you think is you've [00:12:00] got now credibility with other sponsors and other GPS and you've got other folks that now go, wow, look, you've earned your stripes.

[00:12:07] Dr. Jennifer Salisbury: And that's almost in this business, if you want to get into new construction, you've almost got to get a spot where you can earn your stripes. It's a real tough thing to say. And honestly, my husband and I had, we had earned our stripes before this. We didn't really need this project.

[00:12:25] Dr. Jennifer Salisbury: But because he had given his word to his partners, that it would be finished and that we would do certain things. And I would tell the employees that and say, look, the only reason we're here is because Mike gave his word. That's it. It's the only reason. If he hadn't given his word, I'd be on the beach right now, swimming with turtles.

[00:12:41] Dr. Jennifer Salisbury: I said, I wouldn't be here with you guys in the heat. And we did it during COVID and we were in masks and steel toed boots and hard hats. I remember pouring the first slab going, Oh my God, we have 15 more slabs to go. This is never going to end. 

[00:12:55] Randal McLeaird: Oh my goodness. Congrats on persevering through that, [00:13:00] but you said something else that now we should probably touch on, like you didn't need to do this project, right?

[00:13:06] Randal McLeaird: So how did you get started in real estate? Were you buying properties, were you doing properties before you guys moved back to Canada? And so you've always been in real estate, like what's the backstory there? Let's hit the high levels. 

[00:13:17] Dr. Jennifer Salisbury: So I grew up in the military, I went to the Naval Academy and so I was the lemming in the cog of the machine, not entrepreneurial at all.

[00:13:26] Dr. Jennifer Salisbury: I met this cowboy this entrepreneur, serial entrepreneur from Canada. And he was the one that was going, Hey, if we do this, then we can make a bit of money or let me build a house and we'll move into the basement and we'll rent upstairs and they'll pay the mortgage. And we can, leverage that and do it again.

[00:13:43] Dr. Jennifer Salisbury: We got to the point where in Canada, when we had run away from the recession in the US we got to the point where we couldn't sell the houses. Cause that's what we were doing. We were building a house, moving in and then selling them. 

[00:13:56] Randal McLeaird: And 

[00:13:56] Dr. Jennifer Salisbury: so we got really proficient in moving, but then we couldn't [00:14:00] sell it.

[00:14:00] Dr. Jennifer Salisbury: The market kind of flat lined up in Canada. And it was like, what are we going to do? We're running out of cash, we're paying a hard money lender, 14 percent interest at that time. That was good. And so we just needed to figure out. So anyway, we figured out there was a niche in our area.

[00:14:15] Dr. Jennifer Salisbury: Professionals with pets, there was nowhere for them to live and they wanted these bigger units. And so I was like, Hey, why don't I put out an ad and see if we can rent to a family that has a dog and it worked great. And so guess what? That was the name of the game in 2010. And so we still rent to people with pets, I'm a dog lover myself.

[00:14:37] Dr. Jennifer Salisbury: And so that was the niche that we found. So we had to change our business model to renting. That's what we kept doing was then we would rent put long term renters in and then went back to the bank and refinanced and said, okay, We want to take out, you know this much money and we want to leverage it and build another house So it has two suites or three suites in it and keep going and so that's exactly what we did [00:15:00] And that's exactly why we have a portfolio in canada.

[00:15:02] Randal McLeaird: Yeah so you still have some of those assets? Yeah, oh yeah. Yeah? Yeah. Is the main push, now you're talking about RV or mobile park, is the main push consistently been single family or multi family below five to ten units type thing or what has been the big ownership portfolio?

[00:15:21] Dr. Jennifer Salisbury: For sure. So it was about 2016, 2017, we just did an audit of our rentals and cost per square foot. And what was actually making us the most money and also the least amount of interactions, like what was the best maintenance and

[00:15:36] Dr. Jennifer Salisbury: admin one. And so it was pretty clear that anything for us, less than four needed to be sold. We needed to just say, you know what, anything that was a two or three plex, we didn't have any single family homes at that point. We need to just sell it and move on, leverage into the other units. That's when we went for fours and above.

[00:15:53] Dr. Jennifer Salisbury: So four plexes and higher 12 plex. 

[00:15:57] Randal McLeaird: What's the biggest single asset then? Like unit [00:16:00] count. 

[00:16:00] Dr. Jennifer Salisbury: 12. 

[00:16:01] Randal McLeaird: 12? Okay. So still not, you're not getting in the hundred to 200 unit, like large scale sort of deal. 

[00:16:07] Dr. Jennifer Salisbury: No. 

[00:16:07] Randal McLeaird: And do you still cater to or have you niched down still to like, we are the pet friendly landlords or that just happens to be something that's in the listing that's pets accepted.

[00:16:17] Randal McLeaird: Or do you like have a dedicated, like, Landing paid pets, except like. com or say, you know, like, what is it? 

[00:16:24] Dr. Jennifer Salisbury: No for us. Um, you know, where we are in Canada is a very small market and we know our market very well. And in fact, we're always hesitant when we're going outside that market because the rules change, watch your assumptions. And I go, as soon as we're going to shift to Vancouver or greater Kelowna or anything outside of our market, Or Vancouver Island, somewhere in there. It's like, watch your assumptions. Because, maybe pet friendly there isn't what they need. It seems that in all of British Columbia, and beyond, it seems that nurses are needed so badly.

[00:16:59] Dr. Jennifer Salisbury: Especially in the [00:17:00] rural areas. And so there's a lot of catering to travel nurses. 

[00:17:04] Randal McLeaird: Are you guys doing some of that? Some of the midterm? 

[00:17:06] Dr. Jennifer Salisbury: We can I'm not really a big fan of short term rentals. It's too hard on the units. It's really hard on the units, especially here on Maui. I'm not even touching short term rentals here.

[00:17:15] Dr. Jennifer Salisbury: It's long term people here on Maui. When I want them to dig in in Canada, it's a little bit different. And I'll admit that one of the reasons why we have supported traveling nurses in the past is our daughter's a nurse she's in that program. And I can see her grinding going, Oh my gosh, I have to work.

[00:17:32] Dr. Jennifer Salisbury: So much because that we're short staffed and it's like, okay, if I can help bring in one more person, then why not? Why wouldn't I? We can support the travel nurses and we have 

[00:17:42] Randal McLeaird: Yeah, no, it's just one of those, again, I had some furnish finders on, and um, they were talking about that, like that's a big thing that they do.

[00:17:49] Randal McLeaird: But again, you have to be furnished um, right. and we've got some units here in San Antonio that we always consider it. And then we're like, okay, but then you got to furnish it. And how often do you have to turn [00:18:00] over your furniture and like maintain the unit? And so I'm kind of in the same boat as you like, it, it sounds good, but the management is increased.

[00:18:09] Randal McLeaird: So it's kind of like a lifestyle sort of decision. Um, If you want to be like, Always on board or, you know, pay a 30, 40 percent for someone else to manage it. 

[00:18:19] Dr. Jennifer Salisbury: It's a different level of engagement, short term rentals in general. Now, when you're renting to short term professionals, That's an initial its own, you know, when you're traveling nurses, they're not out partying every night.

[00:18:30] Dr. Jennifer Salisbury: They're there working, they're tired. And so you know, travel nurses that have a small pet and they, let's say they bring their spouse and the spouse works from home, get them comfortable. And that's always what we're looking at is, you know, what's the best way we can make you guys comfortable, get you to dig in.

[00:18:47] Dr. Jennifer Salisbury: And several times we've had people extend a couple of times and go, you know what? We really like it here. We like the weather. We like this. We like that. And uh, 

[00:18:56] Randal McLeaird: yeah, 

[00:18:57] Dr. Jennifer Salisbury: that's exactly what we want. I want people who are more [00:19:00] invested in their quality of life. 

[00:19:04] Randal McLeaird: All right, let's talk some tactics then.

[00:19:05] Randal McLeaird: Like, I want to get some nitty gritty stuff here. Because I know you, I mean, you talk, you talk rentals all the time, so you clearly have some systems in place and you have some things, as you alluded to a minute ago you, you set up your podcast because so many people were asking you, like, how do we do this?

[00:19:20] Randal McLeaird: Yeah. Like What are some of the top tools that you use and literally if I came to you and said, Hey, I want to start this, like where, I guess, where do you start? Maybe we'll go down the line and you can kind of tell me how I should get started in the rental game or how you would recommend get started.

[00:19:37] Dr. Jennifer Salisbury: In this scenario, do you already own property or not? 

[00:19:40] Randal McLeaird: Sure. Yeah. I own some property. Yeah. Okay. 

[00:19:42] Dr. Jennifer Salisbury: So if you already own some property, then you already have property that you want to manage. And so if you're going to self manage, you cannot do it all on your own.

[00:19:49] Dr. Jennifer Salisbury: Everybody thinks that they can. Guess what? You cannot. And so the number one rule I have in self managing is you've got to have a team. You've got to have a [00:20:00] team. 

[00:20:00] Dr. Jennifer Salisbury: If you are the one on the phone at 2 AM because of a clogged toilet or, you know, a hot water tank is burst, that is, It's a recipe for failure in my mind.

[00:20:11] Dr. Jennifer Salisbury: So you've got to have a team. If there are people in your realm, in your market that want to help, whether it be a handyman, it be a, you know, your bookkeeper um, you've got maybe a neighbor that, you know, we find that some folks that are retired, they like to have a project that they tinker on. Fantastic.

[00:20:32] Dr. Jennifer Salisbury: So then they would be part of the. Response team is kind of how I look at it and say, you know what? And I pay my response team. I pay them in advance to be on call that. And I pay them for several hours every month. Just say, look, if we don't need you rate. Take that money and that's fine, but I've never not needed them if that makes sense.

[00:20:55] Dr. Jennifer Salisbury: So so you've got to have a team 

[00:20:57] Randal McLeaird: Yeah, Yeah Okay. So the main players in your [00:21:00] team and how much do you pay them? Who are the main players that you get on your team and and how much do you pay them? So you gotta have a 

[00:21:06] Dr. Jennifer Salisbury: bookkeeper. You've got to have a bookkeeper. You've got to have someone Who's handy, whether it's an actual handyman or someone that's helping somebody to shovel snow in the dead of winter or put salt out. And then you've got to have you've got to have a cleaner, but that doesn't have to be a dedicated cleaner. It can just be someone, but I found that the team size is three. That's who you want. And you can be one of the three, but if you're not one of the three, that's even better. 

[00:21:34] Randal McLeaird: Yeah. So you're remote.

[00:21:35] Randal McLeaird: I mean, Bookkeeping can be done remote. Do you do all the books? 

[00:21:38] Dr. Jennifer Salisbury: I do all the books. I do all the money management. Um, My folks do not touch money and um, yeah, so I, I do everything. The only um, the only one of them, my people have a credit card, a corporate credit card. So if they've got to go buy parts, but then we're signed up on all of the local building supply places, if they need, let's say they need paint.

[00:21:59] Dr. Jennifer Salisbury: Well, [00:22:00] My guy can go and get paid. Any of them can go and get paint, for example. Right. So just as an aside. Yeah. 

[00:22:06] Randal McLeaird: So you mentioned that you pay them in advance. So like typically, I mean, I love the idea of having a neighbor and having retail, like I've been flipping out for a long time and I always make friends with the neighbors, like anybody that's around like, Hey, you know, if anything's happening, just give me a call, whatever.

[00:22:20] Randal McLeaird: But. On the rental side, I love the fact that, again, if you're remote, you can simply have your neighbor who is going over there, mowing the yard, doing whatever, they're getting eyes on the house, they can see what's happening and then report back to you. So, What do you pay someone like that in advance for three hours of their time, even if you don't use them?

[00:22:40] Dr. Jennifer Salisbury: I actually pay in advance, I pay for five hours on the first of each month for that month. I think we pay our handyman standby guy. I think we pay him 35 an hour. Typically what we do our strategy is whatever the going rate is, I pay him more because I want them to be excited to come and deal with our stuff.

[00:22:59] Dr. Jennifer Salisbury: And [00:23:00] so we deliberately pay more right on time. Like they give me the invoice. They'll have their money either that day or maybe then maybe the next day, but usually the same day 

[00:23:09] Randal McLeaird: we 

[00:23:10] Dr. Jennifer Salisbury: overpay on purpose. 

[00:23:12] Randal McLeaird: So you build that in. So if a property is cash flowing 400 bucks a month, but you're buying more than one unit, so it should be more than that ideally, right?

[00:23:21] Randal McLeaird: If you're buying multi units then you're just factoring in like 150 goes straight out the door to your handyman on a monthly basis. 

[00:23:29] Dr. Jennifer Salisbury: Yeah. See in my calculation, if we're making, let's say a thousand bucks for a fourplex in a month, my management fees and all our repairs and everything in advance includes that.

[00:23:40] Randal McLeaird: Okay. 

[00:23:41] Dr. Jennifer Salisbury: It's in the budget. Like that in my opinion, that is part of the system. 

[00:23:46] Randal McLeaird: Okay. So I set up my team, I found a place I looked, I have, all right, we're going to get it rented out. What kind of tools are you using? Either technology uh, how are you doing applications?

[00:23:57] Randal McLeaird: How are you approving people? Like, Let's get into the nitty [00:24:00] gritty. Cause if somebody is listening, they're like, I don't even know what I would be doing. 

[00:24:04] Dr. Jennifer Salisbury: Yeah. What 

[00:24:04] Randal McLeaird: are you using? That is allowing you to do what you do. 

[00:24:07] Dr. Jennifer Salisbury: So, As a seasoned landlord, I've got websites set up. And what I did was very simply, I Googled tenancy application, just like a lot of people do.

[00:24:19] Dr. Jennifer Salisbury: And I made a website on it. And so when I advertise my units, I just say the action item for these potential tenants is to go to the website and set up an application. We have found over the years, we don't do showings in advance. We pre screen for deal breakers and we tell them straight up, but I also tell them, look, it's a pre screen.

[00:24:38] Dr. Jennifer Salisbury: You don't need to send me pay stubs. You don't need to send me an ID. But you do need to send me, you know, where are you working? Why are you leaving? Tell me how many heartbeats are in the unit. You know, If you've got eight kids and four pitbulls, that ain't going to work. Right. But if they say, Hey, it's a mom and a dad and two kids, and we have a little chihuahua and two [00:25:00] cars, great.

[00:25:00] Dr. Jennifer Salisbury: Let's set up a showing. It sounds like it's going to work. But if there are any deal breakers along the way, so we pre screen in advance. So that's how we do it. 

[00:25:10] Randal McLeaird: All right. So is it automated? Like you have a website or you're advertising on MLS.

[00:25:16] Randal McLeaird: Do they automatically go to your website from whoever you're listed with? And then they just can see more pictures or whatever. Kind of See your program and then they apply now and then the pre screen is them applying that. Okay. So that's how that works and then once they have all their information that goes to you or somebody on your team 

[00:25:32] Dr. Jennifer Salisbury: It goes to the whole team Okay goes to everybody because I want to make sure that if anybody sees a deal breaker in there they go Hey this person just fill in the blank, had a problem, had a major problem, or, Hey, I know this person.

[00:25:44] Dr. Jennifer Salisbury: They just had a breakup. They're actually great or I know their employer that also happens. Yeah. 

[00:25:49] Randal McLeaird: ISKRA Okay. So it goes to the team and that's all internal communication. And then you guys are reaching out to them to schedule, like, how do they actually get into the unit? 

[00:25:58] Dr. Jennifer Salisbury: Yeah, so one of the team of [00:26:00] three Will arrange to meet with the potential tenant and look at the unit because that's the other issue is that We can screen them all day long, but if they get up there and they go, oh my gosh, you're right next to You know a bar or something that is not ideal for them or hey, I don't like that.

[00:26:16] Dr. Jennifer Salisbury: There's You know, I have to park right next to the unit or there's all kinds of weird little deal breakers for the tenant as well. So the unit's got to work for them. 

[00:26:25] Randal McLeaird: Yeah. Yeah. Okay. But you don't have a remote access system set up. So somebody physically meets them and you don't have it listed with a real estate broker or agent.

[00:26:36] Randal McLeaird: So, Okay. Nope. But the 

[00:26:37] Dr. Jennifer Salisbury: team is also helping screen them. I always say, I want you guys to report back. How's their car look? If their car is full of empty fast food, empties, guess what? How you do anything is how you do everything. That's exactly how the unit's going to look. 

[00:26:52] Randal McLeaird: Yeah. Right. If 

[00:26:53] Dr. Jennifer Salisbury: they show up late or they're in dirty clothes or wife beater and just grimy.

[00:26:59] Dr. Jennifer Salisbury: [00:27:00] Mug boots and things like that. Well, Guess what? That's exactly how it's going to be with the unit. 

[00:27:05] Randal McLeaird: And 

[00:27:05] Dr. Jennifer Salisbury: so there is a housekeeping standard too, where we're watching, we're seeing, we're seeing the speed of their engagement. We're seeing how prompt they are. Did they dress for the showing?

[00:27:15] Dr. Jennifer Salisbury: Because if they don't care, they're not going to care about the unit either. 

[00:27:18] Randal McLeaird: Yeah, that's smart. That's just on a, not just psychological level, but just interpersonal level. Are you teaching that to your people when they're, or have they, okay. So they've been with you long enough.

[00:27:27] Randal McLeaird: They know what you're looking for. Absolutely. 

[00:27:28] Dr. Jennifer Salisbury: No, I teach them, teach them how to do it. I mean, We even go to the point where it's like, look, if we have an empty unit and my pictures are say five, six, seven years old, which happens, right? We've had tenants that just bought a house. Actually, it just happened.

[00:27:42] Dr. Jennifer Salisbury: I've got a vacancy now. And it's like, okay, you guys, you've got to go in. I need you to take new photos of the unit. Do you know how to take photos of a unit? Yeah. I go, no, just snap a few photos. No, you take photos of a unit very strategically. And we go through this and we go through the whole thing. I said, you should end up giving me [00:28:00] about 50 pictures.

[00:28:01] Dr. Jennifer Salisbury: I go, how on earth are you going to give me 50 pictures? I said well, if I tell you the whole strategy of exactly how you take photos, including closing the toilet seat. then. Right. Which is little simple things like that when you know a potential tenant and you see a, a toilet seat up that, again, how you do anything is how you do everything.

[00:28:19] Dr. Jennifer Salisbury: They see that, they go, oh, they don't care next, next unit. Yeah. 

[00:28:23] Randal McLeaird: You know? Yeah. That's, every little detail 

[00:28:25] Dr. Jennifer Salisbury: counts. 

[00:28:26] Randal McLeaird: When I look at listings and I see toilet seats up, or I'll see like a picture uploaded sideways and it's like, well, come on. Okay. So then they come, they come into your system. So it sounds like you don't have a ton of turnover though.

[00:28:42] Randal McLeaird: Like are you, Are you trying to get, yeah, tenants in there? Is it just unique to the size of your units or is it just the area? Okay. So are you signing three year leases? 

[00:28:56] Dr. Jennifer Salisbury: Signing one year lease. And we do rent increases every year. 

[00:28:59] Randal McLeaird: Okay. The 

[00:28:59] Dr. Jennifer Salisbury: tenants know they're [00:29:00] coming and uh, no, our strategy is let's make the units as comfortable as they possibly can, help them mount their TVs on the wall, help them, you know, get the wall hangers on the wall so that they can dig in.

[00:29:13] Dr. Jennifer Salisbury: And we do annual maintenance and we listen to people, you know, when we're near the unit, I, or I happen to run into somebody at the grocery store, which happens, I go, is everything okay in your unit? Is there anything we need to look at for you? Um, But the whole strategy is I want people to be with us as long as their housing journey will allow it.

[00:29:35] Dr. Jennifer Salisbury: And the number one reason we lose people is because they buy something and that's fine. That's perfect. You know, But we don't have a whole lot of turnover. 

[00:29:43] Randal McLeaird: Okay. So it sounds like you're not necessarily using a ton of technology. You don't have some like rental, do you use like a rent ready app folio or anything to manage all of your, it's all just like, uh, I love it.

[00:29:56] Randal McLeaird: Like you're just like on a spreadsheet and this is my tenants and this is what I got [00:30:00] going on. 

[00:30:00] Dr. Jennifer Salisbury: On a spreadsheet. Now we can, and I've had, I've had, you know, people reach out. So we are self managing um, sort of manually at this point. But again, we, that's the strategy. I don't have 500 units. So if I did have 500 units, it would be a lot different strategy, you know, and, and I would scale differently.

[00:30:19] Dr. Jennifer Salisbury: Can we go up to 500 units and have an asset manager that works with my bookkeeper? Yeah, I can do that. Um, But I, again, we have crafted the way that we want to do our business specifically because we had an end goal in mind. 

[00:30:32] Randal McLeaird: What's the end goal? 

[00:30:34] Dr. Jennifer Salisbury: Oh, a boat up in desolation sound north of Vancouver. 

[00:30:37] Randal McLeaird: Yeah.

[00:30:37] Dr. Jennifer Salisbury: Which I'm going to in three days. 

[00:30:39] Randal McLeaird: That's what I heard. So goal has been achieved and now it's off. Okay. All right. I love that. So, All right. So before we get to the boat, cause I have it like highlighted on my page to talk about because I really want to know more about it. I interviewed somebody the other day.

[00:30:55] Randal McLeaird: She's, She's doing um, Uh, she's buying a condo on a ship [00:31:00] that goes around the world and her kids learn on it. Have you heard of this? Cool. 

[00:31:03] Dr. Jennifer Salisbury: Yes. I looked at it a lot going, how would our quality of life be? 

[00:31:07] Randal McLeaird: Yeah. So we, we had a chat about that. Anyway, it would just, we had a long, longer conversation about that than about real estate.

[00:31:17] Randal McLeaird: But anyway, before we get into that, so how many units do you have? And in. How did you craft your goal so that you have, again, it sounds like lifestyle design, you're like, this is how we want our lives to look. That's how many units I need to get to and um, and this is how we're going to structure it. So kind of walk me through that process.

[00:31:35] Dr. Jennifer Salisbury: So when we, when Mike and I left Maui and deliberately went up to Canada and had to basically regroup, you know, in that recession, Mike and I both lost houses. I'll say that again. We both had houses foreclosed on. So it is not, you know, success is a poor teacher. It makes smart people think they can't fail.

[00:31:55] Dr. Jennifer Salisbury: That's Bill Gates. Um, You cannot, [00:32:00] you know, escape this. There is always a downside and there's a reason why there's a foreclosure. Uh, Clause in every mortgage and every lending statement. I'm not saying that to frighten people, but it does happen. So when we went to Canada, we had to figure out what are we actually going to do to regroup?

[00:32:16] Dr. Jennifer Salisbury: And so we leveraged Mike's um, skills as a carpenter and became general contractor, both in British Columbia. And then when we came back here in Hawaii, he became a general contractor as well. Doors, as far as doors um, we're less than 50. So, And it fluctuates because we're building stuff, you know, we we're still it's, it's always moving and you know, it will be by the end of the year, it'll be probably a hundred, you know, less than a hundred.

[00:32:42] Dr. Jennifer Salisbury: So it's, for us, it's always moving. Um, Can we scale up? Yeah, we can scale up. Um, But do we want to, we're to the point now where we're always looking at what's going to make us happy. And, And it's like, it's not just the money. It's the time. It's the energy. [00:33:00] It's the, I love my cup of coffee in the morning.

[00:33:03] Dr. Jennifer Salisbury: Right. That's what I live for is having a great cup of coffee in a conversation. Um, It's not necessarily making, you know, 10, 000 in a transaction. That is fun. Don't get me wrong, but you got to craft it what it looks like. Um, So that's, we really did some soul searching about 10 years ago in the middle of the recession recovery and went, what is it that.

[00:33:24] Dr. Jennifer Salisbury: It really makes us happy. And it was having a good cup of coffee on a boat, looking at our favorite tree in desolation sound period. And it's like, okay, everything we do is going to be, how do we actually make that happen? And it was very strategic. And there's some days where I'm like, there's no way we're going to ever going to do this, but here we are.

[00:33:47] Dr. Jennifer Salisbury: And. The boat is in the marina right now, waiting for us and the coffee. I've got so much Hawaiian coffee on that boat, it's crazy. 

[00:33:58] Randal McLeaird: That's awesome. I [00:34:00] mean, So again, to put this in terms that anyone listening. So you, you say, I need to have X amount of passive income coming in. In order for me to get out of this race and rat race, if you want to call it.

[00:34:17] Randal McLeaird: And so you guys got to that point, even if it took you 10 years, like it took you 10 years and now you're there. Right. And so that's incredible. One, I applaud you guys again for sticking to the plan and doing that. And, And two, now let's talk about the boat. Like, What are you going to do? Like, how big is the boat?

[00:34:35] Randal McLeaird: Like, What is it? Is sailboat? Are you, Are you cruising around? Is it. 

[00:34:39] Dr. Jennifer Salisbury: It's a 45 foot Sea Ray and it's a 2001. So it's an older boat that has barely been used. The engine hours are quite low. And so, um, I think it was set up for charters, but you know, and you know, I'm a former nuclear engineer. I mean, That's what I did in the Navy.

[00:34:57] Dr. Jennifer Salisbury: And so my analytical skillset, the first thing I did when we [00:35:00] were doing due diligence on this boat was give me the logs, give me the maintenance records. Well, There wasn't a log. It was just a history of all the. Mechanics invoices. And so I went, this is not a captain's log. This is just, you know, the mechanics are doing this and changing this filter and, you know, adjusting all of this.

[00:35:20] Dr. Jennifer Salisbury: And so, um, it's so it's a powerboat. And uh, you know, we had a smaller sea ray years ago that we sold before COVID before we came back um, to do the big build here on Maui. And we were always knowing that it was such a small boat, because it was me and Mike, and at the time we had our beloved Uh, golden retriever, German shepherd named Mac.

[00:35:42] Dr. Jennifer Salisbury: And so it was the three of us and it was such a small boat that we couldn't actually have uh, people stay with us. We couldn't have, didn't have a, you know, a proper dining table and, but Mike would always make all this incredible food. You know, You get prawns out of the water and clams and, you know, [00:36:00] fish and I just dungeon S crabs.

[00:36:02] Dr. Jennifer Salisbury: I mean, It's just crazy. So, um, The whole idea here was that. We wanted to be able to have people share with us this boating experience. And that was part of the equation was the boat had to be big enough that it wasn't just us. And uh, and so now we've achieved that. So our, our boat sleeps uh, more than just us.

[00:36:25] Dr. Jennifer Salisbury: So 

[00:36:26] Randal McLeaird: there you go. Are you, Are you guys planning to just stay and, and, or are you just going to be traveling around? 

[00:36:31] Dr. Jennifer Salisbury: So what it's the boat is in Canada, so it's north of Vancouver. And actually that's the discussion at the moment. So, According to the insurance people right now, Mike and I are newbies in the boating world because it's been so long since we've run boats, but Mike ran boats his whole life.

[00:36:45] Dr. Jennifer Salisbury: And I, you know, I'm us Navy trained, but according to insurance, it's quite stale. For now, we're just going to stay , inside of Vancouver Island. We might actually run to Vancouver. We may run up higher to the Queen Charlotte islands. I don't know, to the Haida Gwaii. I don't know if we will or [00:37:00] not, but can.

[00:37:01] Dr. Jennifer Salisbury: Um, But the whole idea is to just, you know, all my podcast recording equipment is on the boat right now. So I don't have a mic. 

[00:37:09] Randal McLeaird: Yeah. Love it. 

[00:37:10] Dr. Jennifer Salisbury: Next year we had talked, maybe we're going to run to Victoria, BC next year and have coffee in front of the Empress hotel.

[00:37:17] Dr. Jennifer Salisbury: That was one of Mike's bucket list items, but we've also talked about maybe going with a flotilla up to Alaska. 

[00:37:24] Randal McLeaird: So, I don't know. What's the range? You're doing this, is this your summer activity and then you're going back to work? Summer activity. Yeah. Yeah. Summer 

[00:37:30] Dr. Jennifer Salisbury: activity. So,

[00:37:31] Randal McLeaird: Months at a time, something.

[00:37:32] Dr. Jennifer Salisbury: Yeah. Exactly. So, It's usually May long weekend. So, Like Memorial Day roughly to around Labor Day. Is when we'll start and we just happen to be back on Maui for a week. I've actually got some meetings going on here for Maui United Way post fire stuff. And so that's why I'm back here. But we're going right back up to Canada Sunday.

[00:37:52] Dr. Jennifer Salisbury: So yeah, the whole idea is to just fair weather voted. And then during the winter, take the boat out of the water, very likely. And um, and 

[00:37:59] Randal McLeaird: [00:38:00] yeah,

[00:38:01] Dr. Jennifer Salisbury: Yeah. Just put it up on blocks and, and then regroup for next year. So not quite sure how we're going to do any of that, but that's part of the adventure of having the boat.

[00:38:10] Randal McLeaird: Yeah. Oh, that's love. I love voting. I nothing. I haven't done anything like that. I don't even know what's the range on a 45 footer, 

[00:38:16] Randal McLeaird: you know, like, 

[00:38:18] Dr. Jennifer Salisbury: It, you know what um, I honestly, I don't know if I can answer that just yet because we're so new to the boat and we're realizing that the fuel tanks are a little smaller than we Thought um, you know, our water tanks are smaller than we thought but we have a water maker We just need to get the water maker going, you know, we're still learning the boat, you know We just bought it four months ago.

[00:38:35] Dr. Jennifer Salisbury: And so I just told mike I said as we're learning the boat Let's not break anything. Let's just learn the boat So so but this it's great because we've got lots of folks that are around us going. Hey, you know Mechanics and such saying look this isn't working. Something's not right here But you know, we don't want to take it any further if we can You Avoid it.

[00:38:54] Dr. Jennifer Salisbury: But you know, I also, the first thing I do is get into the manuals because that's what I did as a nuclear engineer [00:39:00] was let's look for the schematic, you know, where's, where's it broken. 

[00:39:05] Randal McLeaird: That's an interesting background. Yeah. Yeah. Got some history and stories there. I'm sure. Oh yeah. Uh, For another podcast maybe, but uh, well, I mean, I don't know, again, I could talk to you about that in the traveling quite a bit.

[00:39:17] Randal McLeaird: It's, It's, to me, it's one of those things that we If you know your why, once you guys figured out your why, and you guys made it, made a plan that you can create your life around that plan um, I highly recommend anyone taking the time that doesn't have that take the time to, to sit down and figure that out because um, it, it gives you uh, a purpose driven uh, You know, set of goals that you guys can go after.

[00:39:41] Randal McLeaird: So again, congrats on, on getting there. As far as rentals and real estate go, you know, anything else you have going on that, you know, you got this, this um, big project, 60, 60 pad sites. Is that what I heard you say? 

[00:39:56] Dr. Jennifer Salisbury: Or 48 is at the moment. Yeah. We're still working with, tell 

[00:39:59] Randal McLeaird: me, we've got a few [00:40:00] minutes. Tell me what, tell me the background on that and like, what's going on there.

[00:40:04] Dr. Jennifer Salisbury: So Mike um, Mike and I both were, we were looking for a property on both sides of the border and actually we're still looking for property on Maui uh, to set up uh, something similar, maybe not an RV park, but more like a tiny home community, similar in nature, but just different name. Um, So we're, we're working on that on both sides of the border and yet in Canada, we found it faster.

[00:40:24] Dr. Jennifer Salisbury: Uh, So we found five acres in the same general area. Uh, Where our rentals are same area and uh, found this five acres with a renovated home on it. And uh, but it had quite the, let's say collection on it. 

[00:40:40] Randal McLeaird: Yeah. 

[00:40:40] Dr. Jennifer Salisbury: Yeah. Four of the five acres had about 10 feet thick of treasures. And so we've had to 

[00:40:49] Randal McLeaird: remove 

[00:40:49] Dr. Jennifer Salisbury: the treasures, deal with the treasures, lots, I mean, I'm talking decades worth of collecting everything from cars to boats, to bicycles, to air conditioning units.

[00:40:58] Dr. Jennifer Salisbury: I mean, There was one pile that was [00:41:00] nothing but kitchen sinks and bathtubs um, just all kinds of stuff that was just like, Oh my goodness. 

[00:41:05] Randal McLeaird: Yeah. Or is it just like, get it out as fast as you can, or was it? 

[00:41:10] Dr. Jennifer Salisbury: It's a combo. It's a combo. And so this is, again, part of the team. You know, We talked to the team before we bought it and said, Okay guys, what are you interested in helping with?

[00:41:18] Dr. Jennifer Salisbury: And so there were some people who knew like, the bikes went to someone who does nothing but repair, and they teach other people how to repair bikes. And so we said, come on up. See what's good. Cause there were like 300 bikes there. And so some of them went for scrap. And then we had somebody who said, Hey, I will strip everything if we can split the scrap.

[00:41:37] Dr. Jennifer Salisbury: And so we started making these, these deals like this, trying to clear this hoard and uh, and, and now we're to the point where we're finally like, we couldn't even get a proper survey done because there was stuff everywhere. And uh, we bought the property in January. We're six months, seven months into it.

[00:41:53] Dr. Jennifer Salisbury: Now. Um, Yeah, so I think by the time the weather changes we, we've probably got two [00:42:00] or three more months before the weather actually starts to change. Once the ground starts to freeze or it becomes just too muddy, then we just have to stop and Yeah. And that's okay. And that's okay. So we're moving forward on development, you know, working with health inspectors, the safety authority. There's all kinds of things that have to be done to do any development anywhere. And that's part of the grind that we learned at Paradise Ridge, you know, on a grander scale. 

[00:42:24] Randal McLeaird: So, Yeah, 

[00:42:25] Dr. Jennifer Salisbury: so that's, right nowwe're projected to have 48 and that number was because of space and we don't want the lots to be any smaller than that.

[00:42:34] Dr. Jennifer Salisbury: We could probably fit more in, but then we'd have, that affects water capacity and sewer capacity. Yeah. So it kind of, again, you have to weigh the grief to dollars ratio. It's like, how small do you want somebody's little yard to be? If they've got a little dog, are you going to give them six square feet, you know, for their dog to go pee?

[00:42:52] Dr. Jennifer Salisbury: Or do you want, maybe we should put in fire pits. You know, That was another thing, as I said, let's increase the quality of life, let's increase community, let's [00:43:00] put in a bit of a community house, where if people wanted to have a birthday party that's not in their unit, have it in the community house. Well, Perfect, and that's That's really what I like is when neighbors are really looking after each other and uh, and they're a part of each other's life.

[00:43:15] Dr. Jennifer Salisbury: That is just so powerful as a part of a community. And that's what Mike and I create is, is being a part of that community. It's awesome. 

[00:43:24] Randal McLeaird: I hear of a lot of people moving into mobile home parks and RV parks and getting a lot of rent. So just on the financial side of it, like, how did you guys underwrite this deal?

[00:43:35] Randal McLeaird: And how did you get to a number of, we could pay X because we're going to have so much rent. That's one thing on the nitty gritty. And then on the other side, it's like, I'm curious that. The development process in Canada compared to

[00:43:49] Dr. Jennifer Salisbury: the development. I mean, A budget is a budget. It's just now a matter of like I said, right now the number is 48, but if we decide that the number goes up well, then I then [00:44:00] have to add in more electrical connections and each electrical connection right now is budgeted at 15, 000 per.

[00:44:06] Dr. Jennifer Salisbury: So it's like, okay, so if I add four more units and we go to 52, then that means I now have to add 60 more, 60, 000 more. To my development budget, which then directly impacts how much more I have to lend or have to borrow from a lender. And so, it all impacts every bit of it. And so we're trying to do a bit of a phased approach.

[00:44:25] Dr. Jennifer Salisbury: I was trying to do six units based on our existing infrastructure. And, I think everybody has violently agreeing that we can't scale up at all based on our existing infrastructure. It's too limited. It's not going to take it. It's going to fail. If we start hooking up more on the existing well, it's going to fail.

[00:44:45] Dr. Jennifer Salisbury: So, uh, I said, okay, that's fine. So all we do this year. All we do is clear the hoard. We've already improved the property enough. Already improved the property enough because every single stage you have to make sure that the balance sheet and the income statement work every time. [00:45:00] So, And we've done that.

[00:45:00] Dr. Jennifer Salisbury: So then it changes what next year looks like. It changes what our lending requirements are next year. But that's okay. Cause that's part of the benefit, you know, instead of 48 RV spots, maybe we'll only do 20. That's reality. Maybe we'll only do one well in one septic next year because that's what I can afford.

[00:45:17] Dr. Jennifer Salisbury: Stabilize that and then leverage it, you know, the next year or two. That's okay. 

[00:45:22] Randal McLeaird: All right. All right. Break it down for me then. So did you pay cash for the land? 

[00:45:26] Dr. Jennifer Salisbury: Yeah. 

[00:45:27] Randal McLeaird: Okay. Okay. So you don't get, okay. Cause they didn't know if you had financed it and you're like, yeah, it's okay. We'll wait. Um, And I assume you got a decent deal on this land.

[00:45:36] Dr. Jennifer Salisbury: We did. We got the decent deal and here's the other thing that I must tell you on a lot of these real estate deals is that they were years in the making years and the reason why that it took so long and most of these deals take a long time is because we know what numbers work for us, you know, in the buyer, the sellers want what they want.

[00:45:56] Dr. Jennifer Salisbury: And I get it, that's fine. But my number is this. And [00:46:00] so at some point in time, over time, the number that we have, it's like, you know what, what did they say? Half of something is better than all or nothing. And so the person that we were working with for two years on this five acres was given a terminal health diagnosis.

[00:46:18] Dr. Jennifer Salisbury: And he called us and said, do you still want to buy my property? And Mike said, I do. And actually at that point he was already talking with somebody else about another property. And he said, look, I'm only going to buy one. I'm only going to buy one. So if you want me to buy yours, then we need to talk right away.

[00:46:34] Dr. Jennifer Salisbury: And so, we ended up going that way. And I know he wanted more, you know, the original price that the seller wanted was over double what we paid for it but our number, especially because the horde and we couldn't even get a proper survey. I mean, There were so many things along with this.

[00:46:48] Dr. Jennifer Salisbury: The drainage was not good on the property. So we've had to really focus on improving it. But so did we get a deal? Yeah, we got a deal, but we also inherited a headache that was instant. We instantly had to make investments. We [00:47:00] instantly had our civil contractor basically move there and deal with the hoard and the drainage and meet all the neighbors, right. all the neighbors. And so he has a little chart for me and I've met the neighbors as well. Many of them. And he goes, this person, this person, and we know who's not excited about what we're doing, but I also know that they have not seen the Salisbury's in action. I know what we create and I know the value that we bring. And when whatever said neighbor is not happy with us, you know, fast forward to three years when their son or daughter is old enough to be on their own, but not really too far away. They're going to be happy that we have where we have, or they have an elderly.

[00:47:41] Dr. Jennifer Salisbury: Who's still independent and wants to drive, but they want them to be close enough, but not under the same roof. And so what we're creating is the next level of affordable housing because , you know, affordable housing is in my opinion, the land costs are too high to build affordable [00:48:00] housing. It doesn't.

[00:48:01] Dr. Jennifer Salisbury: Affordable housing can't be built anymore. We're past that. So the only thing that we can do in affordable housing is things like what we're doing, this RV park or a tiny home community. Or it is the existing stock that has not been renovated yet. That is the only affordable housing that we actually have.

[00:48:19] Dr. Jennifer Salisbury: Can't be built. The land costs and the infrastructure costs and the bureaucracy costs. That's in the markets that I'm at, maybe not in San Antonio. 

[00:48:29] Randal McLeaird: No, I mean, I just think about this a lot because like it's building a better widget, you know, it's like, well, how do you solve that problem? Because I think about that a lot and rehabbing a bunch of houses.

[00:48:40] Randal McLeaird: I got to the point one dealing with the contractors and just the struggle, right? Right. I was like, there's gotta be a better way. So I started looking kind of similar to what you're doing at land, but to move mobile homes on, because it's just like, okay, it's done. It's there. It's done. It's more affordable than something that I could do in the city [00:49:00] limits.

[00:49:00] Randal McLeaird: So a couple of quick questions. I know we're getting to the end here. I don't know if you have a hard stop or not. No, we're good. I don't 

[00:49:05] Dr. Jennifer Salisbury: have a hard stop. It's okay. 

[00:49:06] Randal McLeaird: On the development, again, going in, obviously, the more units you can get, not obvious, but the more units you can get up to a certain point, then the better it is for the development most of the time.

[00:49:17] Randal McLeaird: How do you know that you have capacity for water, sewer? If this was a deal that I'm looking at in San Antonio, one, I'm calling direct to the water supplier, do we have city water? Or we get put out on a well and I got to call my well guy and be like, Hey, do we have capacity to put like three wells on this five acres, whatever.

[00:49:35] Randal McLeaird: So you guys did all of that due diligence, I assume. And 

[00:49:39] Dr. Jennifer Salisbury: we did all of it. Yeah. 

[00:49:41] Randal McLeaird: And so are you going to have city water? You're going to have well water. What are you guys going to do out there? 

[00:49:45] Dr. Jennifer Salisbury: So in Canada um, it's all rural, so it'll be on a septic, but it's going to be on a giant septic, which will have multiple tanks.

[00:49:54] Dr. Jennifer Salisbury: And basically it's a new technology that is just coming into that area. 

[00:49:58] Randal McLeaird: So we're 

[00:49:58] Dr. Jennifer Salisbury: going to end up doing [00:50:00] regional um, basically local infrastructure, but then we also had to map out with the local health authority. Where's the other wells? We can't put a septic, you know, within a thousand feet of the other wells, right?

[00:50:13] Dr. Jennifer Salisbury: So we had to map it all out and of course all that costs money and all of it takes time But you know what so there were 20 properties around our five acres and I went I want them all 

[00:50:23] Randal McLeaird: yeah 

[00:50:24] Dr. Jennifer Salisbury: do them all and whatever the cost was, I think it was 50 bucks a thing. And not everybody had a well, right?

[00:50:30] Dr. Jennifer Salisbury: Some of them have little private water systems and stuff. But again, we had to organize that and figure that out. So where are the septics? Where are the wells? Also, highways, all our drainage and our driveways, we had to realign. Actually, we just got our permit to realign the access way because think about it.

[00:50:45] Dr. Jennifer Salisbury: If we have 48 feet. Okay. um, Our Vs or you know, tenants that are living there, plus our main house. Um, So that's 49 more. Vehicles or more could be up to a hundred [00:51:00] vehicles. And so we're, we had to really look at the highway impact. Also another thing was mail. Can we offer mail to our tenants? Right now the answer is no, but I had to reach out also our insurer.

[00:51:13] Dr. Jennifer Salisbury: That was the biggest thing is our insurer and say, look, this is what we want to do. Do you guys cover this? Their answer was we can cover up to a point. And I think we're at that point now, but as soon as we start putting the actual pads in and we start bringing in our tenants uh, our RVers um, the answers know that we have to switch carriers.

[00:51:31] Dr. Jennifer Salisbury: So I've already started that awkward conversation with the next insurer, knowing that everybody's got to have the right. Conversations going on, but it doesn't go beyond, you know, also with electric. That's the other thing is, is that do we have the electric capacity? Do we have to upgrade transformers? Do we have to upgrade the infrastructure in this area to support 48 pads or whatever that final number is?

[00:51:54] Dr. Jennifer Salisbury: And so, none of this is easy but that's how we figured it out is asking a lot of [00:52:00] questions. And anytime I talk with somebody the last thing I always say is, Hey, is there anybody else you think I should be talking to about this? Is there anybody else that I should call even, you know, just to have a conversation?

[00:52:10] Dr. Jennifer Salisbury: And the answer is usually yes, or maybe I'll get a phone call back and say, look, if you haven't talked to the safety authority yet, or you haven't talked to the electrical inspector yet or whatever it is um, I was just calling just to, you know, introduce myself. This is who I am. This is what we're trying to do.

[00:52:26] Dr. Jennifer Salisbury: Um, Love to have you out. Maybe we can walk the property or earlier this year when we bought it, the hoard was too big. And so we just said, look, if you'd like to come out, but there's nothing I can show you at the 

[00:52:35] Randal McLeaird: moment. 

[00:52:37] Dr. Jennifer Salisbury: Yeah. Maybe we'll have you out in the fall after we've cleared everything and actually we've got trees that are laying on the property now.

[00:52:44] Dr. Jennifer Salisbury: So I have to now go back to the province and try to get a timber stamp so that we can actually mark the wood and sell the wood. And so this is the next thing where it's like, who knew I was going to need a timber mark. It's a head on a hammer that you hit the end of the log so that the log is [00:53:00] marked that you can sell it.

[00:53:01] Dr. Jennifer Salisbury: So who knew that we were going to get into that, but it's like, you know what, you just, and sometimes you fail, sometimes you fumble. And it's like, okay. So my number one question when I'm doing due diligence on this stuff both pre close and post close is the same question. Educate me on the process.

[00:53:19] Dr. Jennifer Salisbury: Educate me on the process. Where should I go next? 

[00:53:21] Randal McLeaird: Yeah, 

[00:53:22] Dr. Jennifer Salisbury: and we mess up and we sometimes we mess up and it's hard 

[00:53:25] Randal McLeaird: I have two things. Sure. One it sounds like you guys are this is your deal You don't have other outside investors or if you do they are very very understanding because But like how you describe it is it's how i've done things and you're just going through the process you figure it out as you go but if you have A bunch of investors hounding you on progress reports and status updates.

[00:53:45] Randal McLeaird: It doesn't really lend well for the way you guys have structured the purchase because you bought it and you're like, we're going to figure it out as we go. And we're okay because longterm, this is our baby is what it sounds like. 

[00:53:57] Randal McLeaird: Right. 

[00:53:57] Dr. Jennifer Salisbury: Right. 

[00:53:58] Randal McLeaird: So I just want to kind of clarify that it's [00:54:00] not, you didn't, yeah.

[00:54:01] Randal McLeaird: Let 

[00:54:02] Dr. Jennifer Salisbury: me be clear on, on this one that I'm talking about Mike and I are the only players involved, you know, we're the only ones. However, we're going to have to take on a lender because when we get our final number and our final budget, I don't have that number. So we're going to have to take on a lender.

[00:54:17] Dr. Jennifer Salisbury: So we will, right? We will. And let me be clear. I may be flippant about what I'm saying and figuring it out and the timber stamp and all that but I did due diligence like a champ before we even went on it because I thought, okay, if this five acres has got a problem with title or a problem with something that we need to know, if there's a deal breaker in here, I need to know before we close, before we remove subjects.

[00:54:40] Dr. Jennifer Salisbury: I 

[00:54:40] Randal McLeaird: didn't mean to say to flip it. I mean, It, in a sense of you are afforded the ability to Continuously learn on the fly and have those conversations. And rather than like, I have to have a one year closing window so that I can make sure that I can get all these permits and dah, dah, I got [00:55:00] to get rezoned.

[00:55:01] Randal McLeaird: I mean, That's like somebody who's got investors that don't want capital risk at the, you know, so anyway, I just want to clarify that just because it's one of those things. 

[00:55:09] Dr. Jennifer Salisbury: But let me speak to having lenders and wanting status updates. Let me speak to that, because that was the situation that we had in the Paradise Ridge bill on Maui.

[00:55:19] Dr. Jennifer Salisbury: And I had to figure out a way to communicate on a regular, predictable, consistent basis with all of the players, not just the lenders, the insurers, the inspectors, the realtors, everybody. And so every Friday, I would send out an email every Friday, and it was the same thing going, here's where we're at here's where, and it was a three week look ahead.

[00:55:40] Dr. Jennifer Salisbury: Every Friday, I sent one out for years, and the thing is, they always knew, and it was like, okay, here's coming up the doors are inbound, the glass is inbound, we're going to be pouring the pad on this one. The pool equipment has arrived. And it was this huge list. These subs are working in this building.

[00:55:55] Dr. Jennifer Salisbury: These subs are working in this building. We were having the building inspector come out this day. [00:56:00] So there was never a question on what was happening and when. And so they knew. And the other thing I kept was a project log. Here's my project log. This 20 for paradise rich. I started it in 2018 and every day I would write in it, any neighbor complaint, any inspector, any comments.

[00:56:18] Dr. Jennifer Salisbury: Any, God forbid injuries, you know, thankfully we didn't have any major injuries on the build, but anything that was project worthy went in there, including all my Friday updates. Right In there, pasted it right in, and yeah so, but again, It's 

[00:56:33] Dr. Jennifer Salisbury: kind 

[00:56:33] Randal McLeaird: of Like you on my team, can you do all those notes for 

[00:56:35] Dr. Jennifer Salisbury: me?

[00:56:36] Dr. Jennifer Salisbury: But what I did was, you know, because this, the way I did the journal, think about it, the way I did this journal, this is not a binder, it's not a spiral, this is an actual hardbound journal, 

[00:56:44] Randal McLeaird: and 

[00:56:44] Dr. Jennifer Salisbury: everything in here is written and emailed. What it is I've created a legal document. Right. And so God forbid, we end up going to court over something.

[00:56:54] Dr. Jennifer Salisbury: The judge is going to see my 20 journals and go, Holy crap. We don't want to mess with her and her system. [00:57:00] So that's how I take a, with my lenders going, this is how I operate. How you do anything is how you do everything. Every Friday, you're going to get an update email from me. Does it take a long time to do that update email?

[00:57:11] Dr. Jennifer Salisbury: Yes, but it saves them all from calling me. And saying what's happening, what's happening, what's happening. They don't have to call anymore. They know on Friday they're going to get an update email. They know where it's at. Like literally every Friday they knew where it was. I invented this to say, look, I'm going to stop this insanity of incessant calling and wondering what's going on.

[00:57:32] Dr. Jennifer Salisbury: They know exactly where everything is at any one time, period. 

[00:57:35] Randal McLeaird: Do you do that with your rentals as well? 

[00:57:37] Dr. Jennifer Salisbury: Yes, I do. 

[00:57:38] Randal McLeaird: Yeah.It's good to keep track of all that stuff. If you have, and you can 

[00:57:40] Dr. Jennifer Salisbury: do it all on drive.

[00:57:42] Dr. Jennifer Salisbury: You can do it all on, on Google Drive. And I have many, because we're remote, so I have all of our listing, all of our leases, all the rent increases are all on drive. Yeah. I don't have, when I get up on the boat and we have starlink. You know , when we do rent increases this year, it's all electronic.

[00:57:56] Dr. Jennifer Salisbury: So I have some stuff that's hard copy, but I also am trying [00:58:00] very hard to shift over to more electronic. How good 

[00:58:04] Randal McLeaird: is Starlink, huh? 

[00:58:06] Dr. Jennifer Salisbury: It's awesome. It totally changed it. That summer was the first summer we were on a friend's boat because we didn't have our boat yet. And so we were all up there and everybody had Starlink.

[00:58:14] Dr. Jennifer Salisbury: And so we were just learning it. 

[00:58:16] Randal McLeaird: And 

[00:58:17] Dr. Jennifer Salisbury: Cause you know, how much of a power draw is it? Can you have it on all the time? Is it finicky? Well, We found there was a couple of really cloudy days and the power draw spiked because it was searching. It was searching for the satellites. Right. And so everybody had to turn their Starlink off.

[00:58:31] Dr. Jennifer Salisbury: Somebody got on the radio and said, Hey guys, check your Starlink because it's draining your batteries. And anyway, we all had to learn. 

[00:58:37] Randal McLeaird: A new system. 

[00:58:37] Dr. Jennifer Salisbury: It was awesome. 

[00:58:41] Randal McLeaird: Oh, the boating problems. Connectivity. Total first world problems. Total 

[00:58:46] Dr. Jennifer Salisbury: first world problems. 

[00:58:47] Randal McLeaird: I want to say one more thing about, you said mail a minute ago.

[00:58:51] Dr. Jennifer Salisbury: Yeah. 

[00:58:52] Randal McLeaird: Like in your front house, you can't just have a mailbox and you guys give unit one, two, three, one through 48. And it's one address [00:59:00] for the main street. And it all goes. That's wild. 

[00:59:02] Dr. Jennifer Salisbury: So remember where we're building the RV park is not in a municipality, and even if it wasn't a municipality, then you'd have to have a separate conversation with either US post office or in my case, Canada Post.

[00:59:15] Dr. Jennifer Salisbury: Well, Right now they've got rural post boxes. So the community post boxes where they go in the letter carrier will just input everything remotely. I have not started that conversation yet because I don't know the number. But when we do, I can ask them and what they're probably going to do is they're probably going to make me buy a couple of those boxes if this is an option, because right now I don't know if it is, but it's not time to ask that question yet.

[00:59:38] Randal McLeaird: Yeah. We're getting there. It makes sense now the way you described it. Yeah. Because they may not want to deliver 48 pieces of mail. Yeah. 

[00:59:47] Dr. Jennifer Salisbury: Right.

[00:59:47] Randal McLeaird: Okay. 

[00:59:49] Dr. Jennifer Salisbury: Yeah, we had to, it was really interesting because Paradise Ridge has a gate, and has a hydraulic gate. And so we had to get special openers for the postal service for [01:00:00] USPS to actually go through the gate and then go up and, because they deliver mail.

[01:00:04] Dr. Jennifer Salisbury: daily in South Maui. And so it was, yeah. And then of course you talk about fair housing, fair housing, the mailboxes, any common area has to be perfect, you know, within the reach requirements. Can't be too low, can't be too high, can't be too sloped. And I know way more about fair housing than I ever thought I needed to be.

[01:00:20] Dr. Jennifer Salisbury: Which lends perfect to the podcast, because we talk about fair housing. We talk about reasonable accommodations. We talk about emotional support animals, service animals. We talk about all that stuff and it's like, Oh my gosh, how did we get into this? You need a PhD just to do real estate these days.

[01:00:35] Randal McLeaird: Well, You have one. So, right. I do, 

[01:00:36] Randal McLeaird: but you know. 

[01:00:37] Dr. Jennifer Salisbury: Well,

[01:00:41] Randal McLeaird: dr. Jennifer Salisbury. I really appreciate you jumping on and talking about. Just everything, you know, we're just talking rentals, talking about development, all kinds of stuff. So I wish you the best on your journey. I hope you guys have a great time up there and um, yeah, it sounds amazing.

[01:00:57] Randal McLeaird: So, Enjoy that and enjoy [01:01:00] the fruits of your labor. So we'll catch up soon. I want to know how the 48 unit. Maybe 52. 

[01:01:05] Dr. Jennifer Salisbury: Yep. No, I'd love to. I didn't realize you were in San Antonio, Randall. 

[01:01:08] Randal McLeaird: I am. Yeah. 

[01:01:09] Dr. Jennifer Salisbury: Where, Where in San Antonio are you? 

[01:01:11] Randal McLeaird: I'm just, so just North, you know, where McAllister park is like how, how well do you know the town?

[01:01:16] Dr. Jennifer Salisbury: I know I 35, my parents live in shirts. 

[01:01:19] Randal McLeaird: Yeah. Close, close to it. Shirts. Really? Yeah, they're just down the street. I have many projects over there. Yeah. Yeah. So if you ever come to town, let me know. Let's uh, Well, we were 

[01:01:29] Dr. Jennifer Salisbury: just there a couple of weeks ago. Had I known I would have, I would have said something.

[01:01:32] Dr. Jennifer Salisbury: Hey, just as an aside I wanted to tell you that I walked into Shirt City Hall really to show Michael the difference between developing on Maui and developing in Texas. And we walked into Shirt City Hall and I said my name is Jennifer Salisbury. I'm a real estate developer. I'm a real estate contractor.

[01:01:50] Dr. Jennifer Salisbury: We provide housing and I have eight class A units ready to go and I have class B plans ready to go, apartments that we want to build in Canada. And I said, I have [01:02:00] both sets. I'd like to speak to someone about building housing here in Schurz. 

[01:02:03] Randal McLeaird: And I 

[01:02:04] Dr. Jennifer Salisbury: stopped I had a planner sitting in front of me within 60 seconds.

[01:02:09] Dr. Jennifer Salisbury: And even then she said, I could have the mayor, the fire chief, and the building inspector meet with you tomorrow if you want. And if you already have your plans then for a commercial building, it would take us two weeks to issue a building permit. And Mike's jaw was like, I just wanted to show you the difference on where you're building.

[01:02:30] Randal McLeaird: Yeah. But your product that you built is probably not going to hit the same price point in shirts. So 

[01:02:37] Dr. Jennifer Salisbury: I mean, I don't know, 

[01:02:39] Randal McLeaird: you tell me what your cost to build is. Like I'll go down, I'll find some land. We can do something like, 

[01:02:45] Dr. Jennifer Salisbury: we've talked about it. We've talked about doing all kinds of stuff out. My parents live at three double O nine and 78 and in that area.

[01:02:52] Dr. Jennifer Salisbury: And so I would love to do something whether it's in universal city or near Sagin in what's now farmland, but [01:03:00] very soon there's all kinds of infrastructure out there and highways to support. But again, it's the same questions. It's the same process. And how much work do we really want to do?

[01:03:11] Dr. Jennifer Salisbury: How much money do we really need to make to be happy? If our happy place is already defined, careful how much you're chasing. 

[01:03:20] Randal McLeaird: Yeah. Yeah. Good advice. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional?

[01:03:30] Randal McLeaird: If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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