As you know by now, you don’t have to wait until you have grey hair to be a property owner and you also don’t have to be a millionaire to get started in the real estate game. In this three-part Young Landlords Series, we’re sharing the stories of three young women whose financial accomplishments in real estate dispel myth after myth about what is possible. Our final brown girl landlord is Ebony Horton Chicago-based author and entrepreneur. She is 31 and bought her first property at the ripe age of 21. Check out her story below. Check out the story of our first brown girl landlord, Dr. Jasmine Zapata, here and our second brown girl landlord, Denae Patterson here.
Young Landlord at a Glance
Name: Ebony Horton
Age at time of first property purchase: 21
Current Age: 31
Relationship Status: Married
Years in the Real Estate Industry: ten
Real Estate Investment Strategy: Buy foreclosures and auctioned properties
Primary properties of interest: condos
Current City: Chicago, IL
Location of properties: Joliet, IL, and Chicago, IL
A full-time or part-time pursuit of real estate: full-time
Number of properties owned: three
What made you decide to enter into the world of real estate?
My parents always expressed the importance of ownership. They inspired me to get involved. That plus, amongst my peer group, I wanted to stand out. I wasn’t the best student, but I was still smart. So while my friends could brag about their grades and the papers that wrote in their classes, I could say, “I own properties and I’m self-sufficient.”
How many rental properties do you own? Where are they located in relation to where you live? Currently, I own three properties: one 2-unit building and two condos in Joliet, IL and one condo in Chicago, IL which my husband and I currently use as our primary residence.
What buying strategy did you use to acquire your first property?
I always look for something I could “afford”. The first place I purchased was in 21-year old in college with a partner, using the surplus from my student loan money; it was a 2-unit building in a low-income neighborhood. I was anxious to break into the real estate industry and we had just enough to pay for the building and we later made the repairs.
After that purchase, I was lucky enough to be introduced to the world of auctioned properties through my parents nearly six years later. My husband and I were gifted one condo through an auction for $13,000 from my parents.
What other strategies would you recommend newbies use to start their real estate empire?
Build a team: To successfully move from wanting to purchase a unit to actually owning a unit, you’re going to need a lot of support. You’re going to need an accountant, lawyer, loan officer, realtor, contractors, handymen, and property managers. In addition to these people, don’t overlook the help you get at your local libraries that host informational sessions or real estate classes.
Find a mentor: The site Bigger Pockets helped me a lot. It has so many resources for anyone new to the industry. You can also email people in your local area. Don’t limit yourself to how many mentors you have. You may be interested in trailer parks, commercial real estate, or something you might not even know about now. Allow your mentors to open your mind to possibilities you’ve never imagined.
How did you learn about these real estate opportunities?
I learned about these opportunities through the internet and driving around different neighborhoods. Sometimes it’s really that simple. When I was a little girl, my mom would have me ride around with her to different showings. She would look at ritzy neighborhoods. I hated doing it when I was young, but when I grew up and decided to get into real estate, I did the exact same thing.
I would also reach out to realtors about my interest in particular properties. Since most realtors are very persistent, I’d learn about even more opportunities and deepen my understanding of prices and locations that way as well.
How did you prepare financially to be a property owner? Do you still have student loans? : It took me awhile to be even able to start repaying my loans and repairing my credit (which was shot because of late and delinquent student loan payments). But when the opportunity to buy a two-unit building for $42k presented itself, I almost turned it down because I was so focused on paying down this debt, until I saw the connection between real estate and student loans. I had already left DC to return home to Illinois and live on my parents’ and grandparents’ sofas to save money. I was scrimping and saving and doing everything not to dig myself deeper into that debt hole.
I initially looked at buying the two-unit property as another way of adding to my debt. But then I realized that the $42,000 was a one-time payment which would give me hundreds of thousands of dollars in return and get me out of student loan debt. Once I figured that out, it was a no-brainer.
A really precise way to look at it was that I eliminated my debt while also increasing my income through real estate. I go into greater detail in my book “Maximizing My Future by Eliminating My $220,000 Student Loan Debt.” With this strategy, my husband and I repaid all of our loans.
How do you collect rent or respond to tenant complaints remotely?
I use PayPal and Chase Quick Pay to collect rent. One tenant mails their payment through P.O Box. I have contractors I reach out to for repairs.
Where do see yourself in the next five years as a real estate investor?
In the next five years, I see myself managing my investments. I intend on investing in more property. My goal is to be a millionaire.
What lessons have you learned about money, people, and life as a young landlord?
I’ve learned so much but here are my four biggest lessons.
Surround yourself with goal-oriented people that you can learn from: Like I mentioned before, you can’t have too many mentors and there are a lot of free or close-to-free resources out there on the internet and locally. Take advantage of it.
Be creative, consistent, and disciplined: I know it sounds risky but I used $7,000 of my student loan money to purchase my first property when I was 21 with a partner. I made sure I made my money back before I moved on to other endeavors.
Be willing to make sacrifices: I know I was lucky to have a strong family support system. But someone with the same advantages (being able to live at home or being gifted an auctioned condos) may have done absolutely nothing with those blessings. I took these opportunities and made moves with them.
Learn from your mistakes. Even though I made all of my initial investment back from the first property I bought while I was in college, I realized I could have made better decisions had I known more. In particular, I would have learned more about property taxes, how to pick better tenants, and scout for homes in less depressed areas, especially since it was my first go as a landlord.
Kara Stevens is a speaker, author, and founder of The Frugal Feminista, an award-winning personal finance and personal development site committed to helping black women heal their relationships with money and themselves. If you want more financially empowering and inspiring content, start with your free 5-Day Financial Reset Plan.
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