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Episode 05: Richelle Delia - Investing in Real Estate is Not as Hard as You Think

I’ve always had an interest in learning more about real estate investing but was under the misconception that I would need a lot of money to be successful.

Why am I including this info for my audience? Self-care involves several things. Financial stability is surely one of them.

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My guest on this podcast, Richelle Delia, has dispelled several limiting myths that I have held for a long time, and maybe you too. She says “It starts with a dream” -  or, as I say, a dream seed. This is not a typical infomercial. Richelle is real, offers some valuable tips and advice and speaks to our audience.

Richelle's Bio:

Richelle Delia, PhD, is co-founder of Housing Joint Venture, a real estate education and development firm helping professionals explore income property ownership as a safety net, to diversify or create wealth. She and her co-founder grew $300,000 into a real estate portfolio worth over $2,000,000 in three years by focusing on bringing renewal (but not gentrification) to blighted communities.

Dr. Delia is a Fulbright scholar, expert in building materials and advocate for sustainable urban development. Dr. Delia received her PhD in Chemical Engineering from the University of Texas at Austin and lives in Columbus, OH with her husband John.

 

Contact:

Learn more: www.HousingJV.com/bootcamp

LinkedIn: https://www.linkedin.com/in/richellethomasdelia

Email: [email protected]

Download episode here

Transcript:

Sharman Nittoli: 

Welcome to Live Your Bloom Podcast, where we bring people in who can help us learn new skills about dealing with this time of our life, maybe things that we've been thinking about for a long time, but have always had this wall of fear. And we have somebody on today who's going to try to break that down. Her name is Richelle Delia, and she is co founder of the Housing Joint Venture, which is a real estate education and development firm. And she has a PhD. So I'm just going to turn you over to Richelle, how are you today?

Richelle Delia: 

I'm doing great. How are you?

Sharman Nittoli: 

How are you? So happy to see you.

Richelle Delia: 

It's my pleasure to be here and speak to the Live Your Bloom community. I'm excited to chat about the new phase in life and really lifestyle design. Right.

Sharman Nittoli: 

That's what it is. And I'm very interested in this topic myself, because that's the wonderful thing about podcasts that we can bring on people in which we are interested, possibly things that may have paid more attention to, and didn't. So here we are.

Richelle Delia: 

Absolutely, absolutely, you know, it's my pleasure to be here because I think I can serve as almost an evangelist for real estate investing, and how it can be used as a tool to really create the life that you want. And I think you know, you and I were speaking before the segment, about how real estate investing as an asset class can be thought of something that's big and scary and expensive. But it doesn't necessarily have to be that way. Of course, if you have lots of cash and lots of credit, more power to you, that will certainly make your journey easier. But I would say that real estate is definitely one of the more forgiving asset classes. And it just, it's really open to anyone that has the desire and the will to build their dreams. And that's certainly has been our case. You know, I started investing in real estate when I was a wee girl only 21 years old. So I was a poor college student. And I just wanted to actually build a future, you know, my lifelong dream was to be a bum. And it still is to be a bum to be honest with you. Which is, you know, he said to live in life the way that you want to really own your time and own your day. And so with that in mind,

Sharman Nittoli: 

so you can still be a bomb.

Richelle Delia: 

exactly

Sharman Nittoli: 

...and have a definition of what that means. But to be a bomb who is building residual income while bumming around, you know,

Richelle Delia: 

Exactly, it's easier to be a bum when you're well paid. It's absolutely easier to be a bum when you're well paid. And so that you know, that's how I got started just as a as a student in grad school, and I rented out some spare bedroom of the spare bedroom to my apartment mates and used that money. Honestly, I wish I could tell you I did excellent things with it. I did not about shoes.

Sharman Nittoli: 

You're not supposed to at 21.

Richelle Delia: 

I just bought shoes. But it got me in the game and in the in the right mindset and that for that I'm incredibly thankful.

Sharman Nittoli: 

Yeah.

Richelle Delia: 

And as time went on, I went on a I'll call it the 'Eat Pray Love trip', just really trying to find myself and really figure out what would make my heart sing. And on that trip, I was in Portugal, just living in a hotel for the for the time being. And I got an email from my property manager that told me I hadn't gotten paid rent. Now, I was literally on the other side of the world. I live in Ohio right now. And so to be on vacation, and someone to tell me that I've gotten paid. That's like, oh, my goodness, I must have cracked the code at life. How can I get more of this? And how can I purposely cultivate more of this experience in my lifestyle, and that is honestly how real estate became much more of an intentional portion of my life. And from there, we just kind of kept going. And it's it's been absolutely a beautiful journey. We've turned $300,000 to about a portfolio of about $3 million. today. We have properties in four cities in two states, and just really grateful, you know, to now know how to build wealth, and really be able to empower other people to do the same.

Sharman Nittoli: 

Well, that sounds good. And my people that listen, we are of all ages, but a lot of us are clearly over 40 maybe we made the right choices. Maybe we didn't. Maybe we had a very difficult year last year, lost a lot of money and are learning that wouldn't it be nice to have some kind of residual income? So what happens if you are in a position of, I don't know maybe having 500 or $1,000 to begin with? Can someone begin with that small amount of money?

Richelle Delia: 

it yes, you can to be to be frank, you certainly can. But it will be a trade off of time versus money, right. So if you have more money, then you will need less time in order to start sort of get that momentum going. But if you have a smaller amount of money, then you'll need to find more time because essentially what you'll be looking to do is to get properties that are at a significant discount or solving a problem for someone and these are all things that we talk a lot with our students about how you can purchase properties at severe discounts, righ? So you may not be able to go to high flying California, you might have to come to some of the boring Midwest, places like where I am. But I can certainly tell you even in 2020, and 2021, you can still buy properties for $5,000, $10,000, $20,000 - free and clear, it's totally possible. But of course, you know, those things take a little bit more time to cultivate and to discover. But is it possible? Absolutely. Is it possible even in 2021? Yes, absolutely. It is.

Sharman Nittoli: 

Well, that's so good to know. And I do subscribe to a person who helps people find grants for things. And I often, excuse me, often do see that there are grants available for purchases. It's time consuming to research them and learn if your state or the state that you want to move to can offer it. But there can be financial help to make those kinds of investments, especially now, especially now, where we're all trying to get back on our feet. And it could be a wonderful night time to experience a new normal, even for us that we thought we were so comfortable before. But now we feel like, hey, I need a little safety net, what happens if this, this is going to happen? Again, I have to have a little backup. So that's good to know.

Richelle Delia: 

And you know, so I've not used grants before, but I can't tell you the thing about real estate is that it's a people business. And it's really about problem solving. And one of the one of the areas that we found, I'll call it a niche, or an area to really add a lot of value is in the urban core. So basically those inner city neighborhoods, and basically, because there's been a historic lack of investment, it kind of perpetuates a lack of investment. And so people there need quality housing, you know, these are good working people that need quality housing, but it's just that stock is not available, there's not a good product for them. And so if you can go in and purchase a property that is going to be much less than its actual its intrinsic value, which is basically how much the shingles and the drywall and wood floors, you know, if you can purchase it for less than the sum of the parts, so you're purchasing it at a discount. And with a little bit of renovation, a little bit of sweat equity, right, you can make it a place that a family would absolutely love, you get a very healthy return on your investment. And you're providing good quality housing to people that tend to not have as many options as they would like to have. And it really is a win win scenario. And, you know, 2020 showed us that everyone needs a solid place to live where they can feel comfortable. And you know, as an investor when you can get a good return from that so much the better.

Sharman Nittoli: 

Yeah, yeah. Also, speaking of the urban neighborhoods, I did most of my teaching in urban neighborhoods. When I got my degree, I was in Newark, I was in Irvington, I was in the place that is close to my heart, East Orange, and there was a big resurgence of investment in the properties. And as a result, gentrification was a big problem.

Richelle Delia: 

Yeah, gentrification is a big problem. And you know, for that's one of the reasons why we do what we do is because gentrification for anyone who is not aware, gentrification is where you someone purchases a property, they renovate it, and then when they sell it, the county reassesses the property taxes, so that when that property is valued at a higher price, the property taxes increase. The problem is that some the, let's say, the neighbor who may have been a paid off property, they may not be able to afford those new raised property taxes. So that pushes out people that have called this place home, they can no longer afford to keep their hom e, even if they no longer have a mortgage on it. So that's certification. So one of the ways that we specifically combat that is that we suggest holding the property for a longer amount of time. So instead of a like, flipping TV shows like HGTV......

Sharman Nittoli: 

I love all those shows,

Richelle Delia: 

Right? They're so good to watch. But you know, it does support gentrification, because you're selling the property in rapid succession. But if you do a purchased, renovate to rent model, then you get that vibrancy of new residents into the area. But you're not you're not trading the property. So it's not reassessing those property taxes at the same rate, right? So property taxes still are reassessed on a typically, in triangular every three yea basis, but it's gonna b different than then full selling the property. Right

Sharman Nittoli: 

I see.

Richelle Delia: 

And so that just really allows everyone to benefit from the from the revitalization, but less casualty.

Sharman Nittoli: 

So it is time. Definitely a lot of time. It is an investment of money, but you're always looking for the least expensive way of investing. Certainly, I would think you'd need a team of people. You'd have to know who you're going to use to renovate it. This is who's that Nicole on HGTV?

Richelle Delia: 

Yes, Nicole Curtis. Love her.

Sharman Nittoli: 

Next life, I am coming back as a person renovating unsellable houses and getting their HUD houses - she gets them at a really an amazing price. She figures out the money, she invests, she makes a little bit of money, but her hearts in the right place because she actually wants to sell to a family that will love that house. I just think that's just beautiful.

Richelle Delia: 

I totally love everything that she's doing. And I would say we are the rental version of her. I'm sitting to you now in a 1920s historic home and in Ohio. And you know, the crown molding the hardwood floors, the pocket doors, it's all swoonworthy, honestly. And to think that these properties are just a lot of times they've left and left vacant. They are still left unrenovated from the 2008. Great Recession. So unfortunately, a lot of people were hurt there and they had to walk away from these properties. And they A lot of times, you know, even here we are, what, 15 years later, they have not, they've not been put back on the on the market. So everybody loses, right? It's an eyesore in the community, the county does not get the property taxes, and then people don't get a quality place to live. So it doesn't do anyone any good.

Sharman Nittoli: 

Right? Right. And you need something that you know, I always believe it's great to dream but but anticipate what your budget is. And you know, not necessarily live within your means definitely work up to your means become a little higher. But if you're going all out to get that dream home, that is perfect, and it's going to make life difficult for you to pay for a mortgage is going to become impossible to keep up with. I was going to ask you something when you said you rent it out to someone. But am I wrong in thinking that not everybody can just rent a room to to someone to... Is there a legality there?

Richelle Delia: 

It depends on your state. But typically when it's an owner occupant, so basically you're living in the property, it's no issue. Now, if you are renting, if you are a renter, yourself, and you are essentially subletting a bedroom, and that's where you would get into lease violations and things like that. But typically, as you are owning the property and allowing someone to rent a bedroom, more like a long term, bedroom type of rental, that should be fine. Now, I will tell you that with the rise of Airbnb, there have been a lot of new regulations, particularly as it relates to short term rentals. So definitely check your local regulations before doing any of that sort of thing. I did want to mention something else that you were talking about, you know, a lot of people can get, I think you were mentioning, basically house poor, buying too much property for their budget. Right? Yeah. And one of the things that I would ask your audience to consider is, you know, yes, we all want creature comforts, that makes us feel good. But if you are willing to make a, I'll call it a countercultural decision, so for example, instead of buying one $300,000 house, you can buy, let's say, ten $30,000 houses, it's the same amount of equity or buying power. But because you now let's say you live in one of those $30,000 houses, and then rent out the other nine, now you're getting so much more income for the same net capital. You just get I'm saying, And it doesn't even need to be a $30,000 house, let's say you get a $60,000 or, you know, whatever, whatever kind of iteration who works for you, but if you're willing to, let's say live a little bit, maybe slightly less comfortable than you want. But you can spread out that that same buying power, there's some creative things that you can do for that same capital outlay to really have more coming in and then what is going out.

Sharman Nittoli: 

That sounds really good. Yeah, that's good. That's sort of like a future possibility if the creature comforts are still so important to you but on the other hand, you could - I'm a lover of classic homes. I love what you love the crown moldings all this stuff. And, and for me, what I I talk with my community about is just you know, your peace and your fulfillment is in you, it's in you. If it's coming from your external environment or from something else or from the need to purchase this or that in order to fill that gap. That's just short lived because everything eventually comes down to just being a thing. Yes, I'm a musician and I will take my money go out and buy a new microphone and a new this new that, but that's still a that's just the nature of the game and it's still just a means for me to continue to express myself. But I have lived in the same small place for quite a while. You can see it's a little crowded in here. I have to carve out my little corners. But it's okay. That to me is creature comfort because I'm doing what I want to do.

Richelle Delia: 

Exactly, exactly. And I think you can find passion in a lot of things. You know, for me, I think I mentioned to you when we last spoke, you know, when, as you grow, the vision can become more clear, you know, and for at least in my story, you know, like I said, so we started buying some properties. And I had a small apartment complex that I purchased when I was in, I would say, late 20s. And it was previously an eyesore in the community. And we basically renovated it and put it back on the market. And I remember coming to it after everyone had moved in, and you know, it was full community hustle bustle, I went over there on a Saturday afternoon just to run an errand. And everyone was doing totally normal things. The children were playing in the backyard, the moms were scolding them, of course, the dads were washing cars, everyone, never no one was paying me any attention. But I realized, wow, this is an entire community, a community that would not have existed, if I hadn't taken I'm gonna call it the leap to do that. And so at that point, you know, real estate really transitioned from just being numbers on a balance sheet, to a really a way to impact people's lives. Because this is where people's lives happen, you know, there's nothing more intimate than your home, and to be a housing provider just feel so it feels good to be a contributing member of society. And yes, you know, it has to be profitable, I am all for profit, because for profit means you are for progress. So I'm perfectly fine with that. But value for value, I think there's something very beautiful of being an almost a stalwart in a community and knowing that you're really providing something quality that people can enjoy and live.

Sharman Nittoli: 

Very good point. Very good point, again, giving back to the community, which is also something that can be very, very fulfilling, fulfilling to the community and fulfilling to yourself. When I actually toyed around with getting into this whole flip thing, you know, but my music really takes all my time. So at this point in my life, I wouldn't physically be able to go in and be Nicole. I can't be Nicole. She's just crazy. She's down in the basement with the sand coming in. And I'm like, look at this girl.

Richelle Delia: 

And just so petite.

Sharman Nittoli: 

Oh, yeah. So petite. ,

Richelle Delia: 

I don't think I'm much bigger than her. I'm five, three, and 110 pounds soaking wet. So she and I are pretty similar.

Sharman Nittoli: 

Yeah. And, and, but it's joyful to her, you can see that she's very, she's filled with joy when she does it. That is clearly her purpose. Some people will be retiring and be looking for new purposes. And I know that some people have done work on houses and actually had the workman living right there. While they're doing it, you know, you find ways of compensating. So say we have somebody who's very interested in exploring this topic, people who are living the sequel of their lives, okay. We have built up walls of fear about certain things. We haven't been doing it our whole life, investment in the stock market, investment properties, flipping houses, buying new houses, all of that stuff. So where do we start to tear that wall down? Yes. And actually believe that my little $500 or $1,000, that I have scraped together can actually grow into more, and I may find a new purpose while doing it.

Richelle Delia: 

Yes, yes. Excellent question. You know, I would say, start with the dream. You know, and I know that sounds cliche, but honestly, it is, you can have anything that you want. And honestly, it is all possible. I tell you that from the depths of my soul, that is the truth there is, when I started, there's no reason no way I would believe I would have as much as I do today have grown as large as we have, or be able to impact the number of lives that we have. So even if you're starting with something small, it's about being a good steward of the money that you do have, and being wise with that. So how you know, and maybe you don't necessarily begin with owning property, but you can do something that's real estate related. So one of the easiest ways that I think is under appreciated to get quote, unquote, into real estate, is to become a home inspector. It costs honestly, less than $2,000 to get all the education, the marketing everything. You're totally certified. Now you can partner with realtors, you can do direct marketing, each home inspection is about $500. So that means after four of them, you get you've been repaid all of your investment, and you're literally earning money as you learn. Yeah, and I can't think of a better way to really almost monetize your education than that. It's a very low cost to entry. It's less than six months. I think that the coursework is honestly about eight weeks of coursework and you can honestly get more comfort with being in houses in and out of them, and really what a quote unquote good property is versus a quote unquote bad property, And it allows you to build up your, your funds and your reserves. And then you can get into actual ownership, you know, if that's something that you choose to do,

Sharman Nittoli: 

And knowledge is always empowering, and bring self esteem. One of the main things that starts you start to take the bricks down when you start to fill yourself with the knowledge which is, which is what we would tell our children or our grandchildren, wouldn't we tell him that? Yeah, you see a child I'm always sensitive to when I was a teacher to the children that had that low self esteem and, and what do you do, you know, you steer them towards something that they can they can achieve, and just watch them start to walk taller and stand, take in your life.

Richelle Delia: 

You know, momentum builds on momentum. It's a dream.

Sharman Nittoli: 

That's a great statement. It starts with the dream.

Richelle Delia: 

Mm hmm. I'll even give you another cheat code. You know, since you mentioned grants, you know, when I started, I, again, I was a school girl. So I did not have a lot of money, I was literally living off of a graduate school stipend. And the city I lived in, they gave the forgivable loan to help low income persons get into that first property. And I took advantage of that. So basically,how it worked, and again, I was in Austin, Texas at the time. So it will depend on your local area, if it's a forgivable loan, versus a grant or how it's particularly structured. But typically, you take a homebuyer education course. And then they will give you a certain amount either towards your down payment or pay the entire amount in full. For mine, they gave me $10,000. towards that down payment.

Sharman Nittoli: 

Those opportunities are still available, just because I know some people who have tapped into it. And like you say, they may not be the dream home, but some of them are quite nice in different locations with a lot of property. And I know a lot of these big Mcmansions don't are interested in property, but I'm a girl who likes my barbecue, my bocce ball court, you know, I like all that, my garden. So that's where I'm at, you know, so you obviously have your real estate license?

Richelle Delia: 

No, so I'm not a realtor. I'm not a realtor. So I thought I if you want to, like actually purchase a property, I am not that person. So we are purely investors. So we help people build their own real estate investing business plan, because, you know, again, anybody can have cash and credit and just go out and buy houses. But that's really not where they falter. Where they fall to is how do I, what do I do next? How do I make decisions that are not based on emotion? How do I actually grow portfolio and things like that? So I have an insurance license, because we obviously are helping people with finances. And so it helps us look at their full financial portfolio. But no, I'm not a I'm not a real estate salesperson.

Sharman Nittoli: 

Well, listen, I have posted your link on the page. But you can give people just verbally your email, maybe so they can contact you. You offer certain educational training packages, do you not?

Richelle Delia: 

Yes, absolutely, we do. Certainly we do. You can certainly reach out to me on LinkedIn. So Richelle, Delia at LinkedIn, I'm happy to have a conversation there. My email address, of course, is Richelle. That's R-I-C-H-E-L-L-E at HousingJV.com. And of course, if you're interested in learning more about how we help investors to really grow portfolio, because it's not just about getting in the game. It's also about how do you build a portfolio that's going to support your life?Just go to HousingJV.com/boot camp, and that will tell you all about our boot camp and how we help investors and we offer literally hold your hand, step by step coaching and consulting.

Sharman Nittoli: 

And I want to thank you so much for coming on. I hope our listeners got as much out of you as I did. I feel like a couple of those bricks came down

Richelle Delia: 

Wonderful little bit of the fear coming down, little by little, just allow yourself to be open to the possibilities. I know I'm a little woo woo....

Sharman Nittoli: 

No, you're you're obviously, you're living your bloom. And that's what I like. Those are the kinds of people I like to bring you found your passion, your living room, you may have other things you want to do down the road and approach it with the same kind of conviction and methodical plan. You started here. You go there. It's the same thing as you start playing piano and you happy when you can play Jingle Bells. But if you stick with it, after a couple years, you're going to be playing some pretty meaningful music, aren't you going to be better off for it? Thanks again for coming. I found it very valuable. And be well.

Richelle Delia: 

Thank you so much. It's been my pleasure. Have a great one.

Sharman Nittoli: 

You too.