Some people don’t want to flip or do a ton of syndications. Long-term investing is another way to do things. You just need to find the right market. Learn how to find that market and how to finance longer-term deals today with your host Sam Wilson and his guest Mandy McAllister. Mandy is a multifamily real estate investor mindset ninja, coach, and connector. Learn how to bring in new investors and do joint ventures for the long-term today. Also, learn what a ninja mindset is and how Mandy makes time for work while still being present as a mother.
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The Ninja Mindset That Helps You Reach 6 Figures With Mandy McAllister
Mandy McAllister is a multifamily real estate investor, mindset ninja, eternal learner, coach and connector. She followed volleyball to Mercer University in Georgia, where she was awarded Top Graduate in Marketing. Soon after, she moved to Chicago to do a Master’s in Economics and began work at the Chicago Board of Trade.
She also then transitioned to medical device sales, where she was a perennial top performer. After many years of chasing commission, she made it her mission to secure financial freedom for her family. Her real estate expertise includes repositioning underperforming assets to increase cash flow and value. Her passion is to help others define their path to financial freedom, especially women, through her platform, Aspiring Women Achieving More. Mandy, welcome to the show.
I’m excited to be here. Thanks for having me.
The pleasure is all mine. I love Chicago, by the way. I was born in Indiana, I lived in Indianapolis and I would drive to Chicago just to eat pizza and then, turn around and drive home. I miss Chicago.
You did it right because Chicago is wonderful for those things, not wonderful for buying real estate in my humble opinion.
Since we’re on that, the same questions I ask everybody who comes on the show, can you briefly tell us where did you start? Where are you now and how did you get there?
The must-invest in real estate bug bit me when I was nineteen years old at a party in college. A friend was explaining to her dad bought the house that she rented out the rooms to her friends. I thought, “You get to keep that money? That’s the best idea ever.” At nineteen years old, I knew I wanted to do this thing. Analysis paralysis, reading and learning. I got myself all the way to 35 when I bought my first fourplex.
Not only did I not die after that acquisition, but it was also a little fourplex by a state school here in Illinois, it cash flowed $1,000 a month. I found that it’s the action where stuff starts moving forward. I grew the portfolio from that. I started buying the smaller multi into syndications. I then started acquiring in the 50-ish range. We did a 53, then a 47 and we’re about to close on 104.
Try to actively outsmart yourself. Make your thoughts work for you rather than against you.
Was 2020 the first time you closed on anything bigger than ten units?
Yeah.
Congratulations.
Thank you. I think of myself as an incremental investor. I like to prove to myself that any mistake I’m going to make is with my capital so that I know that I know what I’m doing when I’m going to take on other people. We’re venturing into that.
That translates across a lot of industries. Prototyping, testing out, designing it first and seeing, “What do we need to fix before we ship this out to the public?” It’s the same idea. I’m certain that your investors appreciate that approach as well. Before we dig into the types of deals or how you took them down, we get to talk to a lot of people on this show that do that but I want to dig more into your bio here. You said you’re a mindset ninja. What does that mean?
What I mean by that is I pretty much actively try to figure out how to outsmart myself and whatever it is that I’m doing. High-performing women are perfectionists. We’re great and good little girls. We got straight As we raised our hands and we sat and waited our turn. There was a ton of data that support women’s need to feel 100% ready to stretch into a new role whereby men only need to feel 40% ready. It’s 40% or 50%, something in that realm. How do I change my thoughts to work for me rather than against me? That’s what I mean by mindset ninja.
Work for you rather than against you?
Yeah, exactly. Internal dialogue is something that happens. You’re the person who talks to you the most, whether or not you believe it. You are the most influential person who talks to you all day long. I coach high school volleyball too. I had this conversation with a girl. What are you saying in your head when the ball’s coming towards you? She’s like, “Don’t screw up.” What are you going to do? Don’t think about a pink elephant, you’re thinking about the elephant. You’ve got to tweak your mindset stuff every step of the way to get the results you want.
What were some of the things mindset-wise that you’ve found in yourself? Where you said, I’ve got to tweak this?
I think about this path of 19 to 35 that I couldn’t find the bravery to buy a frigging $120,000 fourplex. The transition into that was overcoming a lot of fear of judgment of other people who matter to me. Even going from the 4 unit into the 50 unit that we acquired, that was in the middle of COVID. A thing that helped me there was, at the time, I was reading a lot of stoic philosophy and this idea of getting comfortable with the downside. I can think through that our economic vacancy breakeven point is 46%. We can be 46% of the units not paying and still be able to pay all of our bills.
While we’re in COVID, we know the people who are losing their jobs are bartenders and manicurists. The service people, the people who cut their jobs like the computer programmers, cops and nurses. I can go to look at what it is that they do for work and decide, “At-risk job, not an at-risk job.” Getting comfortable with that downside, noting that I had 46% wiggle room, but only 10% at-risk jobs. It felt like a no-brainer when I could tweak it.
You can define the risk and suddenly, the big scary thing becomes much more manageable. What else were some of the things when you think of being a mindset ninja have been some things you said like, “I had to overcome that and this was how I did it?”
I’m a work in progress. Everybody is. There’s still stuff to this day that I’m working on. Parent guilt is a thing. Mom guilt is its special flavor. The way that I chose to start looking at it was if I go 100% all-in when I’m talking to Sam and 100% all in when I’m coaching my volleyball, then I never have to be sad that I should be doing something else because I’m showing up exactly where I need to be all of the time. When it’s time to play Legos, it’s time to play Legos. I go all-in on that, too. That has helped remove a lot of that problem so that I could move my dreams forward. I’m showing my kid by example that pursuing your own dreams is an important thing.
Having the awareness that maybe you weren’t present and saying, “I will be 100% present in those playing with Legos, coaching volleyball or talking to me on a podcast.” What were some of the things you did in order to not just tell yourself, “I’m going to be present?” It’s one thing to say I’m going to be present and then there’s maybe some steps that you’ve had to take to say, “This is how I forced myself to be present.”
Time blocking was a huge one. I do read a lot or listen a lot because I’m dyslexic and I consume books via audible, but Cal Newport’s stuff. If you’ve read any of his work, Deep Work or A World Without Email were two informative books that helped me shape my approach. I block every single morning between [8:00] AM and [11:00] AM, that is my time to get into deep work and move your life forward, stuff done.
Now that I’ve left my W-2, it’s this whole new world. We were talking offline that I bought a planner that helps me focus. It’s called the Full Focus Planner. It helps me figure out the three big rocks for my day so that I can move stuff forward. I’ll also say during that time, I turn all notifications off. It’s not even that I turn my ringer off because I’ll hear it buzz and I’m like, “What’s going on? Does somebody need me?” When I’m asleep, if I turn on the timing, I get a lot more done. I can get into real deep work.
Those little foxes that steal the grapes, they’re buzzing and you’re like, “That’s interesting.” The next thing you know, you’re engrossed in a twenty-person text conversation and then you look back over your computer and you go, “Where was I?”
It takes you time to get back into that deep work. If you could stay down in that deep work and knock it all out, you get more done in so much less time.
In this age of distraction, there was one that was called The Perfect Day Formula. He had suggested you don’t read the email until after [2:00] PM. Don’t open it. Don’t look at it. Read your email after [2:00] PM. I’m like, “That’s hard to do.” Those are the things that suck you in.
A punchline to my life is I chose not to pursue medical school because of a conversation with a doctor who said, “You don’t want to do this because you’re going to be on-call and that’s going to suck.” I ended up in business and was on-call for doctors in business. To be able to move forward a side hustle while single-momming in that drop everything and run on-callness that is medical device sales, that time blocking stuff became even more important.
I would always keep a list. I would drive a lot for my old job and I would yell at the voice message thing in my phone, “Siri, call Sam on my to-do list.” When I had the half-hour sips of time, which isn’t ideal, I would know exactly what to do rather than waste any time going to get stuff done. That helped a lot when I was overbooked.
Talk about a frenetic environment to work. You worked at the CBOT, Chicago Board of Trade. I bet that was a harebrained everywhere experience.
Only do deals if they’re really good deals.
I loved it. You have to be organized in thought and that’s one of my superpowers. My brother became an emergency room physician and it’s the same gene. The same this, then that and figure that out and get this person. That was a lot of fun.
When you say organized in thought, translate that into what you’re doing in real estate.
There’s a ton of moving parts in real estate. In my early twenties, when I was at the board of trade, my old brain worked a lot better than when I kept a tiny human alive. The idea of being able to silo out the stuff that I need to do, I refined it because of the reading that I did. One of the things I’m doing is macro blocking. Aspiring Women Achieving More stuff happens on Tuesday. If you want to talk about something that’s not urgent on that, I’m going to set it to the side and deal with that next Tuesday. I’m going to deal with everything that’s this day. It’s getting surgical on what it is that you are able to work on and focus on.
That’s a challenge. It is a skill and it’s a tough discipline to get yourself in that groove.
It can be learned and it can be improved. Just because you’re not good at it now, doesn’t mean you’ll never be good at it. It takes some hacks. It takes some effort, but I’m here to tell you that I’m a lot more focused and a lot more able to move stuff forward than I was months ago.
One of the other titles that you’ve given to yourself is you’re a connector. What does that mean? Why do you focus on that?
What matters to me is helping people meet their goals. If you want to earn more money, you got to help more people fix their problems. It feeds my soul to be able to help people get what it is that they need. Whenever someone tells me, “I’m working in short-term rentals in the Poconos.” “I talked to three other people doing short-term rentals in the Poconos. Can I make an introduction?” Now, they’re able to compare notes. Maybe use suppliers that are the same and maybe get to scale. Number one, it feeds my soul, but number two, it helps me move my business forward.
You’re probably right. It was Zig Ziglar. I’ve heard it said some other ways from those people as well, but it’s like, “If you want to solve your own problem, solve somebody else’s first and then yours will take care of themselves.” You’ve given us some great mindset tangible skills that all of us struggle within any business. This is not just real estate.
It’s the human experience. Especially given the day and age that we live in, our attention is monetized by multi-billion dollar corporations. What’s funny is Zuckerberg’s kid will never be on Facebook. All of these big creators of the world don’t do the consumption of the stuff that they create and they keep their kids from consuming it too. How to take it back is difficult but necessary if you want to move stuff forward.
Let’s talk about your real estate holdings. You said that Chicago is not a place to invest. Where’s a good place to invest? How did you pick it out and how did you guys start taking down deals?
In my humble opinion, I am a buy-and-hold long-term investor. That is my interest. I don’t want to be a flipper. I don’t necessarily want to do a ton of syndications because those whole times are usually 3, 5, 7 years shorter term than longer-term. What I need to feel good about a long-term hold is that there are a lot of people living there, that there are a lot of jobs that are going to help people keep living there and being able to pay their rent. If I look at the state that I live in Illinois, I live in the South Suburbs of Chicago, we have had a significant mass exits since COVID.
If you look at the heat map of where people left since COVID, the state that lost the most people in New York. The second state is Illinois. We beat California. Every MSA in Illinois has shrunk in population quarter over quarter since I’ve been looking. That’s been a lot of quarters. We’re talking Bloomington and Carbondale, all of the MSAs. I want the population moving towards me. I coach to this a lot. When you’re picking a market, you got to think that you’re in a canoe.
You’re going to get where you’re going. Right. Do you want to go upstream where you’re going to have a lot of brain damage, be super tired and it’s going to take you way longer or do you want to position yourself with the current, so you’re going to get there faster and effortlessly? Your girl, Mandy, wants to do things as effortlessly as possible. What yielded my decision of where to go bigger was I want to be able to get there and back before dinner. That was the criteria.
In the Midwest, I could be on a 45-minute flight or a 2 or 3-hour drive that’ll put me down there and back by dinner. That ended up being Kansas City and Indianapolis. I would go, “Kansas City, this steel. Indianapolis, this market. I could do 0.02% of my money over here,” but did you hear what they were doing? I FOMO’d my way to inaction.
When I talked to the people I’m helping get started investing, we get super granular in figuring out exactly what you’re looking for and exactly the market. Drill it down, maybe even to a couple of ZIP codes because the more precise you are and what you’re asking for, the more likely you are to get it. Once I settled on Indianapolis and Indianapolis only, we went under contract for a 53-unit joint venture. Me and two guys and then subsequent to them, we’ve done another 47 in Indiana.
I love the idea of you’ll get there and back by dinner. You have that capacity, especially flying out of Chicago. You can get anywhere direct.
I moved to the South Suburbs, so I’m only two and a half hours from the outskirts of the MSA. It makes it even easier.
One of the things you said about your investing criteria is that you want to be a long-term investor. A lot of the syndications that we see are, as you just suggested, 3, 5, 7 years. It’s not uncommon. How do you finance longer-term deals? Are you bringing on investors?
It started as a happy byproduct, but I did make a personal decision to be investing with my own dollars first. Largely because many people coming up in syndication that I had spoken with who also had day jobs, I would ask, “What do you want to see to be willing to leave your job?” They would say, “I get this acquisition fee, that disposition fee and then all I got to do is four deals a year. Then I can quit my job.” I thought, “You have to go find four doable deals in a year to feed your kid? What happens if there are not four doable deals?”
As a sales rep for the bulk of my career, I know I show up with different energy if I’m way needing my number or if I’m short at it. I want to position myself and I have positioned myself to only do deals if they’re really good deals. I have a floor of income that provides for all of my needs to live, which is why I was able to “retire” from my day job and then swing for the fences on stuff that I believe is a good deal. I run a Meetup out of Chicago. My business partner and a contact of his that he’d had for some time tells them it was getting crushed during COVID and wanted to place some capital into multifamily, but didn’t have the bandwidth.
His problem was he needed a place and a lot of capital. Our problem was we wanted to go bigger and didn’t have a lot of capital in place. Partnering with people who had a different problem that also wanted to be active in the deal is what helped us take down that 53. The 47 was a total of five of us. If you have some amount of capital, some liquidity, it’s a competitive advantage. Doing joint ventures helps you enjoy a lot more of that upside and not feel pressured to sell if you don’t want to sell.
Having investors on with that longer term, especially if you’re joint venturing and you say, “We don’t plan on selling this.”
It’s easier to align in the long-term idea with three or five people versus the 40 people you would need for a $10 million raise.
That’s a downside to syndication, the business plan is not just contingent, but it forces the hand of everybody to sell. The majority of people are going to want the equity payout because they want to see their money double in a few years. We sold this but unfortunately, you’re probably also selling the milk cow. There’s no more milk after you sell the cow, which is not good. Maybe it is for certain situations, but that’s one thing that we’ve seen a lot in a syndication space. It’s that exact thing where people are not able to solve that equation of how do we hold this longer?
If you want to earn more money, you need to help more people fix their problems.
Another reason to go a little smaller, in my opinion is the result of my decisions is in this atmosphere we’re in, we have super-low interest rates and super-compressed cap rates. Something that I’m not hearing a lot of people talks about is we’re all taught to go for a big value add. You add the value, you get out into 3, 5, 7 years. If we acquire at a four cap, in five years’ time, it’s completely possible that 4% cap goes to a 5% cap.
You probably have debt that expires at the end of that five years that you’re going to have to refi do something. The formula to figure out a value of a commercial building is net operating income divided by cap rate equals value. If I have the denominator that increases from a 4% to a 5% cap, that’s an increase of 25%.
The law of small numbers. If I’m going to increase my denominator by 25%, I also have to increase my numerator. Meaning my net operating income, I have to operate at 25% higher rates in order to break even on my value. I feel like if you don’t have a longer-term plan or a contingency plan B, C, D, it’s something that gives me the willies a little bit.
You bring up a valid point. There was an odd time in the market. No one has a crystal ball, but it’s that odd time of like, “If we have serious inflation and if interest rates rise, does that mean that cap rates also go with it?” There are arguments on both sides of that equation like, “Yes, no, maybe.” We’re in no man’s land. That’s smart, especially if in your situation you go, “I don’t care what the exit price is. Am I still making money?”
It’s more so having those contingency plans because I see a lot of syndications that hit my desk for passive investment. The business plan is we’re going to thread the needle. We’re going to refi year two and we’re going to make sure that this happens. We know that we’re going to increase rents by 20% because we are magic. That makes me nervous. I need a bunch of different contingency plans to feel comfortable.
Thanks so much for taking the time to chat about your business, mindset and about the things that you’re doing. I love your growth strategy. You’re doing awesome things, so keep it up. Before we jump into the final four questions, is there anything else that’s top of mind you’d love to share with our audience?
If you’re reading and you are in the no man’s land that I was in from 19 to 35, figure out what it’s going to take to get yourself into action because this is entertainment if you’re not figuring out how to move something forward. Do yourself a favor and move yourself forward.
This is not entertainment. This is how you move forward. That’s straight talk. I appreciate that. Question number one is this. If I give you $20,000 to invest in real estate and you had no previous real estate investing experience, what would you do with it and why?
I don’t have a lot of regrets in my life, but one is that I didn’t house hack. I didn’t buy a fourplex and live in it. I wish I would have had the wherewithal and the confidence to not need to live in the coolest neighborhood in Chicago. The costs, however much to live in that. I couldn’t afford to buy a fourplex. I would have bought a fourplex and lived in it.
Question number two is this. If you could help our readers avoid just one mistake in real estate, what would it be and how would you avoid it?
It’s analysis paralysis. At some point, you’re going to know all that you can know. You’ve got to understand that you’ve got to let go of that branch and take a risk. The mechanics of doing anything is 10% maybe 20% of it. Once you understand that, 80% of it, 90% of it is just figuring out your head. Don’t get in your way.
Question number three is this. When it comes to investing in the world, what’s one thing you’re doing to make the world a better place?
This matters to me a lot. I joined a mastermind and one of the pillars we worked on is giving back. Volunteering as a fourteen-year-old volleyball coach is one of the greatest things. It’s a chance to impact girls in this part of their lives. I can’t wait to know if I’ve had the impact that I hope I do. Also, the Aspiring Women Achieving More platform is helping women figure out what’s the next right step for them every single day. Both of those things matter a lot to me.
On the fourteen-year-olds, they’re at an inflection point. I don’t know anybody, myself included, that didn’t play high school sports that still can’t go back and say, “That person was instrumental or influential.” If you’re wondering, you’re having influence. Keep it up.
Thank you for that.
Last question for you, Mandy. If our audience wants to get in touch with you, what is the best way to do that?
Find me on my website at MandyMcAllister.com. It’s a catch-all for everything. My investing arm, Aspiring Women and the mentorship stuff I’m up to. Find me there.
Thank you so much for your time. I do appreciate it.
Thanks for having me.
Important Links:
- Aspiring Women Achieving More
- Deep Work
- A World Without Email
- Full Focus Planner
- The Perfect Day Formula
- MandyMcAllister.com
- https://www.LinkedIn.com/in/mandy-mcallister-1221895/
- https://www.Facebook.com/MsInvestorAgent
- https://www.YouTube.com/channel/UCzmAp5I-QO4PS3U9kUEXRtQ
- https://www.Instagram.com/msinvestoragent/
About Mandy McAllister:
Mandy McAllister is a multifamily real estate investor, mindset ninja, eternal learner, coach and connector. She followed volleyball to Mercer University in Georgia where she was awarded Top Graduate in Marketing. Soon after, she moved to Chicago to do a Masters in Economics and began work at the Board of Trade. Her professional career transitioned to Medical Device Sales where she was a perennial top performer. After many years of “chasing commission” she has made it her mission to secure financial freedom for her family and others through syndications and coaching individuals to realize their personal potential.
