Building a Virtual Cash Flowing Portfolio with Grace Gudenkauf

Grace Gudenkauf: [0:00] My second deal ever, I convinced a bank to let me put 10% down on two duplexes. And looking back, I'm like, how did I do that? I wish I I wish I had the balls to do that today.

Mike DeHaan: [0:09] Yeah. Right.

Grace Gudenkauf: [0:09] Like, I don't think I could accomplish that today.

Dan Austin: [0:12] Right.

Grace Gudenkauf: [0:12] But, yeah, I built most of my portfolio before I moved to Tucson. Welcome

Speaker 4: [0:19] to the collecting keys podcast. The show where you'll learn how to use real estate to create massive passive income. Real estate doesn't have to be a get rich slow game. Listen to the country's top real estate operators, and you'll have all the tools you need to replace your w two income and go beyond in under twelve months. Ready to take things to the next level? Let's jump in with our hosts, Mike DeHaan and Dan Austin for today's episode of the collecting keys podcast.

Mike DeHaan: [0:56] What's going on, guys? On today's episode of the collecting keys real estate investing podcast, we have Grace Gudenkauf, who is a very, very established young investor with a super impressive story with how she has grown. She has grown a quite decent portfolio in the Midwest. She manages it all virtually right now based out of Tucson. And she is starting to build out a very successful women in real estate community called wire. I apologize. I spent half the episode saying InvestHer, and she was way too polite and just didn't correct me. There's another women's group called InvestHer, but she runs WIRE, and WIRE is way better. She should ignore the other one that I was talking

Dan Austin: [1:38] about the show. Well, unless the investor guest comes on here, then they're even.

Mike DeHaan: [1:41] Then they're even. Then they're even. Then they're both good. Don't even know who runs that one.

Dan Austin: [1:45] Yeah. I've just Yeah. Me neither. I just know you were saying that. Was like, I gotta say something now.

Mike DeHaan: [1:49] I'm that. Have She just sat there, just, you know, nice as can be, didn't say anything, and I was like, man, let me eat that, but

Dan Austin: [1:56] She's awesome though, but to like get back on track, like she started in 2020, and so she graduated college in 2020, and started investing in real estate in 2020, and I just think the grit and just the like, I don't give a shit. I'm gonna figure it out during like a crazy transitionary period for everybody, including her. And now she's got this basically financial freedom set where she didn't have she was able to quit her job and dive right into real estate full time in just a short order. That's pretty impressive.

Mike DeHaan: [2:20] It's super impressive. She's probably what, like 25 right now. And she's her life is going to look so different from most 25 year olds right now. She went in, took action, figured it out. And, you know, as she we kinda get later into the episode, she started talking about how she set up the management to do everything virtually. And I think it's so impressive is she, like, does it in house. So she goes through how she set that up and what it looks like. And it's so just, like, stupid simple that you're like, why doesn't everybody do this? It just makes too much

Dan Austin: [2:48] sense. Absolutely.

Mike DeHaan: [2:49] Anyways, so really, really awesome episode here with Grace. Definitely give her a follow on Instagram and reach out to her. That's why people come on these shows. They want you to engage with them. And she is somebody that you're definitely gonna wanna watch in the real estate space going here into the next couple of years. She's doing some really big things. So anyways, guys, enjoy the show with Grace. It's a really good one. And we appreciate you all. You're here today with Grace Gudenkauf. Super excited to have you on the show. You have started to make a name for yourself for your investor group that you found as well as being a very put together midterm investor. You know, you've been doing a lot on Instagram for a little while too. So it's always fun to have somebody else who is trying to like grow their brand come on the show. So I always feel like you have a lot to value because I guess a lot of value to bring, because that is what you're sort of putting your mind to. Right? So Grace, thanks so much for coming on the show. For people who aren't sort of familiar with you and your background, we'd love if you could give everybody a little bit of an intro.

Grace Gudenkauf: [3:46] Yeah. Well, first, Mike and Dan, thanks for having me. A little bit about me. I started investing about three years ago right out of college. I knew I wanted to put my money to work. I wanted to be smart with it. I had no idea what that meant, but I started looking for an idea of what to do, found bigger pockets like probably most people. Then we dove right in, my boyfriend and I, dove right into a DIY full gut house, which we got in over our heads immediately. Thought it was gonna take three months. It took six months. Super not fun. But at the end of the day, I was like, I think we could really make this go somewhere. Let's not let the money stop us. Let's keep growing. And then now fast forward two, three years, I'm a full time investor. I don't invest in my backyard anymore. I just moved to Tucson. All my investments are in a very small area in Eastern Iowa. I have a full time property and project manager that helps me manage from afar. And I also have a group called Women Invest in Real Estate that you hinted at, and we do retreats all over the years. We have a podcast, and we have a lot of fun.

Dan Austin: [4:59] Wow. I've gotta ask you a question. Eastern Iowa. Interesting. How did you find that?

Grace Gudenkauf: [5:04] So when I started investing, it never occurred to me to go anywhere other than my backyard. That's where I was born and raised and lived until about six months ago.

Dan Austin: [5:14] Oh, okay. So you're familiar with the area?

Grace Gudenkauf: [5:16] Yep.

Dan Austin: [5:16] Is that where you went to college too?

Grace Gudenkauf: [5:18] I went to college about two hours away. So Okay. I mean, all my family Yeah. Lives Yeah.

Dan Austin: [5:23] You sorry. One more note. Did you graduate during COVID?

Grace Gudenkauf: [5:26] I did. 2020.

Dan Austin: [5:27] Wow. So you graduated college during COVID and started investing in real estate. It's an interesting time to say the least for multiple transitions.

Mike DeHaan: [5:34] Absolutely. It's funny. Eastern Iowa, I feel like everything's two hours away from Eastern Iowa, though. Like I said, like

Grace Gudenkauf: [5:41] That's so funny because Amelia and I were just saying my the person I do wire with, how everyone thinks we're like next door neighbors because we're both from Iowa.

Mike DeHaan: [5:51] No. No. I grew up in Montana where everything is, like, really far away. So I imagine just like everywhere else is kinda middle of the country. It's the same it's the same. No. So so that's cool, though. So you started investing there and then moved to Tucson. So I guess what what did that transition look like? Because I know a lot of people, they use their investing endeavors in their own backyards as a reason why they can never go anywhere. Right? Or why they can never move. But you sort of like crack the code. So first off, I guess but let's let's take one step back for you to dive full into that. When you started investing, what did that look like? Especially during COVID, how were you finding deals? What kind of deals were you looking for? What was, like, your ultimate goal?

Grace Gudenkauf: [6:32] Yeah. I first started buying deals off market, and that's the only way I knew how to buy deals, which I think is is really backwards from most people. I had a lot of of luck with word-of-mouth referrals in a small town. I offered off the bat a thousand dollar referrals to anybody who would bring me a property I closed on. And so everybody's uncles, friends, brother had a property they were selling, and I've paid out referrals for them. And so I was able to buy so many off market deals through just connections and relationships, which is a bit specific to a small town. So that really worked for me. And how we funded the first one is my boyfriend, Brandt, who's my, I call him, like, my life partner and my business partner. So if I say business partner, that's what I'm talking about.

Dan Austin: [7:19] Gotcha.

Grace Gudenkauf: [7:20] He had done one flip when I was still in college. So he had a, like, a little bit of money. We had to put $16,000 down, and then we DIY ed the rehab, and then we bird it to do the next one. And then pretty quickly, I got into creative financing and private money to keep purchasing properties. And for most things, I've done burs on. So I've been able to kinda use a few sources of capital over and over.

Mike DeHaan: [7:45] Nice. That's great. What what kind of price points are you playing within a market like that?

Grace Gudenkauf: [7:51] My bread and butter is purchase price around $8,090,000, put 20 to 30, maybe 40 into it. So typically all in around $1.20. They appraise for $1.50 to $1.80, and then typically rent at, like, above the 1%.

Dan Austin: [8:08] Nice. That's awesome. Nice. Very good. And is that with the MTR model or just standard long term rental underwriting?

Grace Gudenkauf: [8:15] That's standard long term rental underwriting. I will throw in the caveat that, I mean, it's Iowa. There's not a ton of appreciation, so it's easy to think these numbers are sexy. But, like, I'm never gonna have a 6 figure appreciation on a property because the whole property is worth barely 6 figures.

Mike DeHaan: [8:32] Yeah. Yeah. And that's always the trade off, right, that a lot of people don't understand. Right. But you you get the cash flow, which is what most people when they start real estate are kind of pursuing.

Dan Austin: [8:40] Yeah. I do have a question I wanna ask you about that, because this is an interesting topic that a lot of people actually, like, you know, contemplate. It's like, do I go into appreciation market or cash flow market? And you talked about the big thing, is you're getting the cash flow instead of appreciation, but does like a hot water tank cost the same amount in Eastern Iowa as it does in Tucson? Like, I'm I'm just curious, like, the prices for you to do the same maintenance and manager on their property, and so does that make up for having to have more cash flow, I guess?

Grace Gudenkauf: [9:09] I think it's a lot cheaper in Iowa. I've only done one property here in Tucson.

Dan Austin: [9:14] Okay.

Grace Gudenkauf: [9:15] So it's been hard to understand.

Dan Austin: [9:18] I'm guessing labor is a lot different.

Grace Gudenkauf: [9:21] Labor is more expensive. I don't have, like, a general percentage throughout here of how much more expensive. But yeah.

Mike DeHaan: [9:29] Nice. That's great, though. So that kinda got you started. And then when you started, you know, doing these rehabs and and all these different things, was it mostly single families? Were you getting into multi families as well? Like, how much of a portfolio were you able to accumulate there before you decided to move to Tucson?

Grace Gudenkauf: [9:47] Yeah. I did the first probably five or six or seven were single family. I don't have anything larger than a fourplex. So I have two fourplexes, two duplexes, and the rest are single family. But my second purchase ever, actually, I take that back, was two duplexes. And that was kinda crazy. I was just thinking about this today because I commented on somebody's post on Instagram about banking and I said, since moving, I've only acquired my primary here in Tucson and two foot.

Mike DeHaan: [10:19] Yeah. Nice. Yeah. That's fair, though. I mean, that's so impressive though. You did that right out of college.

Dan Austin: [10:24] Did you come

Mike DeHaan: [10:25] from a real estate background or you just decided that that's what you wanted to do and you just jumped into it?

Grace Gudenkauf: [10:29] No. I did not have a real estate background. I graduated with an engineering degree.

Dan Austin: [10:34] So Makes sense.

Grace Gudenkauf: [10:36] And my sister was super financially savvy. And, like, my senior year of college, she bugged me for, like, an entire year. Like, track your spending. Do a budget. Like, track your net worth. See if you can graduate debt free. So she was kinda like in the back of my head, be smart, be smart, do something good. And I knew I was gonna have a great salary because my job was actually out of California. So I was getting California COVID pay while working from home, living with my parents in Eastern Iowa. I was like, this is like all I got no expenses. Gotta This be smart with cannot wind up being a stupid car payment. I have to use this to get ahead. And the other thing I'll add is growing up, I always knew I'd have my own business. I'm just one of those people. Like, I wanna do it my way. I don't want you to tell me what to do. I wanna live the life I wanna live. So So I always knew that in the back of my head. And then when real estate kind of became on my radar, I was like, oh, I think this is the opportunity to be my own boss.

Dan Austin: [11:33] Yeah. Mhmm. It's fascinating. That's a good I mean, that's a really good story because most people during that time period were not thinking about actually doubling down and working their ass off. Right? They're kinda crying and saying, oh, I guess I can just work from home and enjoy this time. So Yeah. That's impressive. I also wanted to make a comment on your 10% down on the duplexes. I think it's just having the confidence of not knowing. Mhmm.

Grace Gudenkauf: [11:54] I know. I really think it is.

Dan Austin: [11:56] You just walk into the bank and you're like, I think this is how you're supposed to do it. Right? And so probably for you a lot of things having no knowledge going into this is what helps you scale as as well as some resiliency and willing to work your ass off.

Grace Gudenkauf: [12:07] I think there was a little bit of I don't wanna say ignorance is bliss, and I don't wanna say naiveness. But, like, in that realm of when I started, I was just like, I can do that. No. Who said I can't? I'll do it. Yeah.

Mike DeHaan: [12:22] No. Seriously. That's great, though. Yeah. It's funny too coming from the engineering background. There's that's such a common transition in the real estate world. Both Dan and I, we both got engineering degrees. That's how we met each other was at school. And we've had a lot of different people like we have an instant investor group coaching program, we had a lot of engineers that come through there. We've had a lot of people on this show that come from engineering backgrounds, I think there's just something about like the tangible, sort of like, I guess, the an analytical nature of real estate that really vibes well with engineers and makes it a pretty easy switch. Mhmm. Now that's awesome.

Grace Gudenkauf: [12:54] I don't have a ton of I only did one year as an engineer before I quit my job, so I don't have a ton of practical experience to apply to real estate investing. But I will say the one thing it made me comfortable with was numbers. And it made me comfortable to be the only chick in the room. And I don't care, it doesn't bother me, doesn't faze me, I can handle it.

Mike DeHaan: [13:14] I think that's huge too, honestly, Right? That is a real estate is traditionally a male driven business. And having the confidence to, you know, go in and ask the bank for 10% down, like a lot of that was probably driven just by, developing that confidence in that that work. So Mhmm. No. That's very cool. So you built that portfolio. You moved to Tucson. How did the transition look to starting to do everything remotely like that? Because like we talked about at the start, that's one of the biggest things that tends to keep people in areas that they're not even always happy or they wanna live.

Grace Gudenkauf: [13:48] Yeah. So for me, since we started DIY, I knew it was gonna be so hard to move from the employee to like the actual business owner. I would always get so mad when people would say, oh, you guys are handy, which, by the way, I'm not handy. Brandt is handy. That's how you make money in real estate. I'm like, no. That's how you make a job in real estate. That's not how you make a business. And so I kinda wanted to move because I was like, We need to get out of this. And my partner at the time was doing real estate full time with me kind of purely by accident. We thought we were gonna move to that job I had in California and didn't. So we ended up just, you know, doing real estate and he was ready to go back. He's also an engineer. So I said, you know what? Let's go anywhere. Let's just go anywhere cool and we'll figure it out. So we ended up in Tucson. That was the best job offer that we also wanted to live. And I was super excited because I was like, now I have to be I have to figure it out now. I didn't know how I was gonna do it, but I figured it out. Hired my project manager slash property manager, tried to really drill down my processes, my systems, my SOPs. I'm still figuring it out. There's still things I mess up, but it's getting better by the day.

Dan Austin: [15:06] Yeah. Yeah. There's no better way to do something than like break it or just like put yourself in a position where you have to figure it out. Gotta put yourself under the under the fire. And I like to like, the comment I resonate with too is like being handy is definitely not the way to be successful in real estate because I started out like doing all the work myself, and I taught myself on YouTube, I think a lot of people do this, but like until you stop doing that, you can't scale. Mhmm. Yeah. Because it's just really a job. And there's a lot of people that will make a little, that will do it for way less money than you're Mhmm.

Grace Gudenkauf: [15:35] And I'm thinking about like, I used to clean the properties. Like, that's crazy. I cannot believe I used to do that.

Mike DeHaan: [15:42] Yeah. I mean, always start somewhere, right? It's all part of the learning process. You know, even though it is something that I don't think a lot of people should do, I do think that there is some value in learning just like kind of the handyman or the renovation part of it by doing

Grace Gudenkauf: [15:56] For sure.

Mike DeHaan: [15:57] Because then it's easier to call a general contractor out if they're BS ing you. It's easy to have, like, an idea about what things kind of should look like, what they should cost. Mhmm. Because if you're completely ignorant, right, you can get taken advantage of.

Grace Gudenkauf: [16:08] Absolutely.

Mike DeHaan: [16:09] But I mean or there's like, there's me where me and my wife, we figured out when we started flipping houses, would we just watch YouTube videos of like, oh, this is how you do install a bathtub, like, whatever it was. And then I still get ripped off because I just because I just don't know anyway. But I I you know, that's why that's why I have Dan. Dan usually does that side of our business.

Grace Gudenkauf: [16:30] No. I agree, though. And I don't I still, in the grand scheme of construction, don't know anything. But I know enough to, like, have a good conversation with the contractor, recognize when something's off, and have a general ballpark of what's supposed to be going on and what it's supposed to cost. Perfect.

Dan Austin: [16:47] That's huge.

Mike DeHaan: [16:48] So when you were starting to stand up your virtual team, you said you have a property manager. Did you have like an interview process or did I mean, there more than one property manager in the miscellaneous small town in Eastern Iowa? Or, like, did you actually have to sort of figure that out?

Grace Gudenkauf: [17:03] So it's internal. So he only works for me, only works reports to me because I could not give up 10% on my long terms and then probably like 15 to 20 on my midterms. I just there was no way I was gonna do that. It woulda halved my cash flow. But I started when I was still in Iowa, I did I found somebody for ten hours a week to work remotely and do all the things that I do on my computer. I found her on an investor Facebook group. There's one in my market. And I posted the job description. She wanted to learn about real estate. She applied. She was fantastic. I had her for a full year. And then when I moved, I she was also kinda moving on in her life. She was also an engineer. I don't even know why she decided to be my property manager. She was way smarter than that. She was getting married, you know, kinda moving on with her life. I was moving to Tucson, so it was a really great point for me to take that ten hours a week, make it a full time position, add in some flips to pay for that person and keep that person busy. And so now I have a forty hours a week salary w two property slash project manager who lives in Cedar Rapids. He's there at the properties like almost every day, Very hands on.

Mike DeHaan: [18:20] Man, you you found a w two that's we're able to do that and it's less than 10% of your rental income?

Grace Gudenkauf: [18:27] Yeah. So I pay $36,000. This kid is 20 years old. He got a Nice. 20% pay increase by me. Was a property manager before that, making not very much money. So I hired him. And then for me, I'm like, okay. That's like a flip or two that I need to do to pay for him and not be out of pocket for him.

Mike DeHaan: [18:49] Absolutely. We gotta go to Iowa where we can pay people $36,000 a year, man.

Dan Austin: [18:53] Dude, we gotta go anywhere but where we live. Like, I I don't even know what the minimum wage here in Washington. Like, what that is an annual salary, but we pay people like $20 an hour or something like that. That's minimum.

Mike DeHaan: [19:01] Well, in Washington State, yeah, so the minimum hourly wage is what? $15.75. You can go work at Panda Express down the street here and make $25 an hour. It's insane.

Grace Gudenkauf: [19:10] It's $7 in Iowa, I'm pretty sure, which is honestly trash. Yeah. It's it's terrible.

Mike DeHaan: [19:15] Terrible. Yeah. But either way, as a business owner, it's good for a capitalist Right. People.

Dan Austin: [19:20] Yeah. You know? Like, you're running a business

Grace Gudenkauf: [19:22] for to say it, but yeah. But, yeah, for me, I just I also the third thing I wanted to do is I was like, this is really good accountability for me to keep growing my business. I can't just have him do nothing. Yeah. It'll be a good way for me to because my ultimate goal is to have a self sustaining business. I don't wanna make $10,000,000 a year in real estate. I don't want 10,000,000 units. I want a self sufficient business where I work three to five hours a week just keeping things on track, and everybody else And can do their I make a few $100,000 a year, and I'm good.

Dan Austin: [19:52] That's awesome. That's so understated to actually have a very finite vision and goal. Because like if you just say you want more, you may not actually get more. You might just get more work and effort, and at the end of it, you might not get what you want.

Grace Gudenkauf: [20:05] Yeah.

Mike DeHaan: [20:05] Yeah. Yeah. We should we should reconnect in two years when you've reached that goal and see if that's still what you want because things things change.

Dan Austin: [20:12] You'll probably probably want something different. But yeah,

Mike DeHaan: [20:15] yeah, when Dan and I first started working together, it's actually about 2020. It was really 2020. So it was similar timeline to you. Our initial goal was to do 50 properties in ten years or something about 50 products in ten years. And now we've done over 350 in three years. And now your goals just change significantly over that period of time. But you're like, we can make a couple $100,000 a year. How do we get to 7 figures? You don't necessarily need it. But what else you

Dan Austin: [20:39] can Yeah. There's a challenge, You're looking for the next challenge, it may not be in real estate for you though, it might be more a business, right? Or something You'll definitely obviously be challenged, but from a real estate standpoint, I can agree, I there are some people out there that's they wanna get a portfolio to a certain size, and they're okay with it being just that size, getting that much cash flow, that much equity, whatever it is. And then that's just like its own entity that just gets put over to the side and just Sure. Try why you do whatever you wanna do.

Grace Gudenkauf: [21:06] Yeah. Sure.

Mike DeHaan: [21:06] But when you do reach out though, will fully free you up to work on the other things that you like, like your invest her group, which I know you've been really driving with. So let's dive into that a little bit and what that looks like and what your goals are with with that. Is that a separate business, or is that just kinda like a hobby? Like, do you monetize that at all?

Grace Gudenkauf: [21:25] It totally started as a hobby. I started it in 2021 when I was doing my very first property because I was like, I wanna meet some other cool chicks who are doing this. I don't really see any. I found Amelia, my business partner, on Instagram, even though she lived two hours away. I was like, hey. We should start this meetup. It will be fun. And then we did it for free for about a year. And then last May, we were like, alright. Let's start monetizing it. We did 6 figures in our first year, which was super exciting. Obviously, not profit. 6 figures of revenue. And we now it's like probably a big I don't wanna say bigger business, but I I work on it more than I do real estate, I would say.

Dan Austin: [22:04] Yeah. And and I just wanna make one just clarification. It's how do you say the acronym? Because I know Mike's saying investor, but it's not investor. It's

Grace Gudenkauf: [22:11] Yeah. WIRE.

Mike DeHaan: [22:11] Oh, WIRE. WIRE. In real estate. Am I thinking is there an everyone that's an investor that I'm There's an investor. Yes.

Grace Gudenkauf: [22:17] I apologize. That's a really big answer.

Mike DeHaan: [22:19] To go and, like, don't worry about that. I've been in the the wrong zone the entire time.

Grace Gudenkauf: [22:22] That's okay.

Mike DeHaan: [22:24] I have I have I'm a bad person. You're fine. You all look to say, get out of here. We did a show a little while back with someone who's actually a good friend of ours. And I said her name I said her name wrong for, like, years, and she's never corrected me. And then she corrected me, like, at the end of the show, and I was like, what?

Grace Gudenkauf: [22:39] Oh my

Mike DeHaan: [22:39] gosh. Yeah. So the wire community, I apologize.

Dan Austin: [22:42] No. You're

Mike DeHaan: [22:43] good. To so you do these meetups all around the country, are they kinda like local? So is this something where you are traveling, or are you helping people start up their own wire communities around The US?

Grace Gudenkauf: [22:55] Yeah. We have a franchise like that. InvestHer does that, which is a great business model. We just haven't really implemented that. We do the retreats. So we'll do three day, four day retreats, weekends. We've done Salt Lake, Denver, Orlando, going to Phoenix. So all over The US, people come from all over The US. There's usually 15 to 17 women who come stay. They're literally the best weekends of my life. We, like, laugh so hard and learn a ton and network, and there's been some incredible partnerships that have been born from those retreats. And then the other things that Wired does, we run boot camps here and there. We run online meetups, podcasts. We have a free Facebook group for any women in real estate and and some other things. So we're kinda all over the board, but it's a lot of fun.

Dan Austin: [23:47] What generally type of of women or or people that join your group? Like, I guess, what's the gamut of people, like, with skill level in real estate?

Grace Gudenkauf: [23:55] Yeah. So within our Facebook group, it's all over the place. Within our retreats, we say that you need to have done three deals in the last year. So we'll get people who are just starting out. But a lot of times, we'll get multifaceted business owners, which is super fun. Like, just naming a few. Know some of my good friends have a construction business and real estate, own salons and real estate, have a beauty business and real estate. So that's really fun too because then it becomes more about just like business and so much more than just like houses, houses, houses. Yeah.

Mike DeHaan: [24:29] Yeah. Yeah. I mean, entrepreneurship as a whole, it's so broad. Right? And it's funny. I I find that that becomes a common transition for people as they, you know real estate becomes their introduction to business.

Grace Gudenkauf: [24:41] Yep.

Mike DeHaan: [24:41] And ultimately, as people learn more about business systems and opportunity and, like, actually how to make money, business becomes much more interesting as opposed to just like accumulating assets all the

Dan Austin: [24:53] Yeah. And I think the cool thing too is is when you start getting into where you're hearing, like you're talking about these these women with like the real estate and business, like what it is is you you get around entrepreneurs, and then you start getting super excited because you're like, I wish I thought of that idea. Mhmm. Yeah. You run into people with like the craziest, coolest business that you would have never thought yourself and you're like, okay, cool. This person's like me. They're an entrepreneur. We're all doing something in this space and it's just a much easier conversation and like, there's so much more, I guess, likability within people that are doing the same exact thing as you, just in different ways.

Grace Gudenkauf: [25:23] Yeah. I think you guys are so right. Real estate really is a baby step into business and I think it's because you learn how to spot opportunity.

Dan Austin: [25:31] It is.

Grace Gudenkauf: [25:32] And that is all you really not all, but that's the first step you need to start a business. Once you learn how to spot spot opportunity. I mean, I'm sure you guys are the same. Every store you go into, every coffee shop, every business you encounter, you're like, wonder how they make money. I wonder how their business is set up. I wonder what their margins are, and you, like, can't shut that off.

Mike DeHaan: [25:52] It's so true. It drives my wife crazy. She'll, like, bring up, like, a new product or something like that. I'll be like, how do you think they do that? Like, where do they, like, get the parts from it? Like, it seems like it's really cheap for, like, what they're providing. Like, it doesn't make any sense. And, you know, instantly, it just isolates me from all of my friends who are not entrepreneurs. But that's

Dan Austin: [26:11] why you're like, don't know,

Mike DeHaan: [26:12] just use them. Yeah. Right. That's why you have things like the wire community, though. Right? Yeah. So Exactly. Awesome. No. So that's cool. So I guess what are your ambitions with that? Like, if you go forward one year, five years, where do you hope your your Wired community is?

Grace Gudenkauf: [26:26] Yeah. I like we're we are discussing, I would love Wired to become more about entrepreneurship in general rather than just real estate focused and really focus on teaching systems and processes and maybe even morph into a consulting thing. If Wire doesn't do that, I'll definitely do that on my own. I really love systems and processes and, you know, teaching people how to actually look at their books and what that means and how to write an SOP and how to actually, you know, negotiate deals with other people. Like, all those things I think are so fun. There's so many small business owners out there who start with a passion and never quite make it a business who I think could use a lot of help.

Mike DeHaan: [27:13] Yeah. Yeah. Absolutely. What's like the typical age demographic you find that is drawn to stuff like that? Is this something so with our group, we always find that there's like a certain demographic for every kind of like group that's out there. So is yours is it mostly like younger women? Is it kind of just like women of all kinds? Like, are there any sort of, like, correlations in industry, or is it purely just people that like the vibe and just come in?

Grace Gudenkauf: [27:38] So we've had women from 22 to 52 at our retreats, but the average age is 33. So thirties is really our biggest target audience.

Mike DeHaan: [27:48] Yeah. Nice. That that's good. The problem is with, like, real estate when it comes to guys is there's really one target avatar. Right? It's white dudes that are between the ages of, like, 25 and 45 that have figured out how make money in some capacity, and they want to figure out how to spend more time with their families. Like that is every single male trip in real estate group. 100. It is a lot. That's super awesome. So grace. Cool. So you have any other, I guess, like good insights on the virtual side, I guess, the you said, but while you've moved to Tucson, you've done two flips. You say you bought a rental use your primary home there. Have you had any sort of, I guess, revelations moving there with the interest rates being where they are? Kinda like what's the future look like on that end for you?

Grace Gudenkauf: [28:35] Yeah. I thought that maybe I would start real estate in Tucson, but I quickly realized it's like starting another business. So as of right now because I was thinking, okay. I'll get my cash flow in Iowa, and then I'll make my money off appreciation and flips in Tucson. But I haven't quite gotten down that path yet, and I don't think I will. Yeah. I definitely had a bumpy road. I do have to point this out. I don't think I said this. When I was moving here, before I hired my full time person, I lost $800 on a flip, the first property I've ever lost money on because I was trying to manage it while moving across the country. And that was the light bulb moment of, that was so avoidable. There was no reason for me to lose $800 on that flip. Like, that was ridiculous. And so it really drove me to, you know, get my shit in order and hire things out and focus on what I'm good at. And I would say that's the final thing I've really had an epiphany about is for the longest time in real estate, was like, don't I don't get why I can't work harder. Like, I know I could analyze more properties. I know I could write more blog posts for WYRE. Why don't I do it? And a book that really changed my mindset was 10x is Easier Than 2x by Dan Sullivan. And it really hammered home, instead of trying to grind harder, focus more on, like, your 20%.

Grace Gudenkauf: [29:53] We've all heard, like, okay, there's eight 20% of what you do drives 80% of your business. And since I've thought like that, it's really been a game changer, I'm more excited to show up and do the work that I have to do. And I am able to outsource things and focus on things that actually move the needle. So if you haven't read that book, I highly recommend it.

Mike DeHaan: [30:11] Yeah. I mean, I just wanna say losing $800 on the flip, that's practically breaking even in the real estate world. It's a little bit.

Grace Gudenkauf: [30:16] I know. I'm like, okay. That was a course. That was a course on how to not flip properties. Got it.

Mike DeHaan: [30:22] But That I mean, yeah. That way the market's doing it.

Grace Gudenkauf: [30:25] But I should've made

Dan Austin: [30:25] You should

Mike DeHaan: [30:26] oh, you should've made a bunch. Yeah. Okay.

Grace Gudenkauf: [30:28] Here's the kicker. That was like my second flip ever. If I would've kept it Mhmm. And not gone with all the price drops, I would've had $40,000 in equity and a cash flowing rental.

Mike DeHaan: [30:38] That sucks.

Grace Gudenkauf: [30:39] So did I lose 800 or did I lose 40 k?

Dan Austin: [30:41] Right. That was a good point. What opportunity did you give up then?

Grace Gudenkauf: [30:45] Exactly. Yeah.

Dan Austin: [30:47] That's very true.

Mike DeHaan: [30:47] Yeah. It's always tough, right? But you know, you live and you learn. That's how it goes.

Grace Gudenkauf: [30:52] I know. I'm like, as long as I make that $800 an investment into how to run a better business, it's okay. Yeah.

Dan Austin: [31:00] That's a good education. I mean, Mike and I, anytime we've kind of flubbed up like, it's like cool, we just got a degree in whatever that mess up and you learn it. And you could obviously cry and go home and quit, but that's not how you're gonna make money in

Mike DeHaan: [31:12] this business.

Dan Austin: [31:13] Inevitably, you're gonna have challenges. You gotta learn how to overcome them. And the challenges are gonna be different, that's the cool thing about these markets, right? Like, right now the challenge is like, how the hell do I buy anything? Mhmm. Just because of interest rates, and there's not a lot of inventory, but we'll look back on this time, if we were staying in the game and doing what we're good at, you'll look back and say, boy, I'm glad I stuck it out.

Grace Gudenkauf: [31:31] Yes.

Mike DeHaan: [31:31] And, you know, you get the capital back and allows you to do different things. And it's always tough when you're in transition as well. Like when we were going from like me working on my own to me and Dan working together, I fire sold a property, listed on the market, took the price shops at all those things. I needed the capital. COVID was going on. And I lost like $25. And it was a really big deal at that point in time. Like that was a huge amount of money. And if I had held on to that house for an extra year, I probably could have sold it for a $100,000 more just with the way the market went. But at the same time, having that capital back and being able to refocus allowed us to make millions of dollars over the next couple years just doing our other business.

Dan Austin: [32:08] So That's true.

Mike DeHaan: [32:09] Yep. Know, sometimes it is what it is. Is what it

Grace Gudenkauf: [32:13] Well, yeah, that turned out that $25,000 mistake, like we're just saying, you turned it into millions. That's the key. As long as you can build off

Mike DeHaan: [32:22] of Exactly. Awesome. Alright, Grace. Well, good stuff. We're gonna go into our end of show questions here. So we have the same three questions that we ask everybody that comes on the show. So the first question is, what is your craziest real estate investing story? And this can be a big win, it can be a big loss, it can be a crazy tenant, It can be like a crazy renovation. Whatever you got.

Grace Gudenkauf: [32:47] I have two, and I'll make them quick. The first, I had an a c a very senile tenant who called me at two in the morning one time. I was in Mexico, so I ignored it. And on my Google Voice, it transcribes the voicemails. And it said, hi, Grace. I just took a healthy shit, and I'd like, basically, I don't know what to do.

Mike DeHaan: [33:06] I don't know to

Grace Gudenkauf: [33:07] And I was like, there's no way a 70 year old man just told me that on voicemail. I will save that voicemail forever. We played it on our podcast actually. It's

Mike DeHaan: [33:16] And then

Grace Gudenkauf: [33:17] the second, which that's funny, it was no harm done. Second one, I couldn't talk about for like four months because I was so upset. But basically, I had two crazy MTR, an older couple who, like, I kinda started off on the wrong foot with them because I wasn't giving them very clear communication, which was my fault. And then they basically made a mountain out of a molehill, so I told them to and they were insane. So I told them that we needed to end the lease, and they proceeded to harass me on social media, on my Facebook, my Google business, sending me emails, messaging me drunk, mean messages on Tenet Cloud. And he even looked at my LinkedIn, you can't post on people's LinkedIn if you're not friends. I was like, that is the hardest thing I've ever had to deal with. Like, somebody who's just completely insane, and there's nothing you can do about it unless you wanna stoop to their level. Totally. I tried to get my lawyer involved, but I was actually on a sailing trip in Greece, and my my email didn't send. It bounced.

Dan Austin: [34:20] Oh, no.

Grace Gudenkauf: [34:20] Thankfully, because I think I just needed a day to calm down, but that sucked.

Mike DeHaan: [34:25] Just went full crazy. And that's a problem with having a platform too is you become very easy to find very quickly.

Grace Gudenkauf: [34:31] I know. This. Yeah. They didn't find my Instagram, but everything else.

Mike DeHaan: [34:36] Everything else. Yeah.

Grace Gudenkauf: [34:37] Yeah. And I didn't know for, like, a whole twenty four hours that they had went through my Facebook and said like, these people are trash. These people are terrible. They just wanna steal your money. And someone randomly texted me, who the hell is Mike and Nancy or what? I don't remember their names. But I was like, oh god. I think I know what happened. And I went and looked and they had a heyday.

Mike DeHaan: [34:57] Oh, man. Yep. Were you at least like moved to Tucson at that point? So if they did go full psycho, like you had some distance?

Grace Gudenkauf: [35:04] No. And like, I'm not gonna lie. I wanted to go psycho back a little bit, but I kept it I was very professional about it. But that was so hard. I just wanted to be like, you guys are the craziest tube because I've ever seen. Like, what is going on? That's funny. But I did it. Yeah.

Mike DeHaan: [35:22] Yeah. Stuff can get weird. Good for you. You showed maturity. Yeah. Did.

Dan Austin: [35:25] Didn't show maturity because I'm still internally laughing about the healthy shit thing.

Grace Gudenkauf: [35:29] I know. I know. I know. That's just it's pure comedy.

Mike DeHaan: [35:33] That's hilarious. That's hilarious.

Grace Gudenkauf: [35:35] It's funny.

Dan Austin: [35:36] I have a five year old and a one year old, so poop jokes are funny. There you

Mike DeHaan: [35:40] Cool. Alright. Second question. What is the number one tip you have for either a new investor looking to get started or for a small time investor looking to take their business to the next level?

Grace Gudenkauf: [35:51] I would say if you're nervous, think about the worst case scenario, which sounds a little morbid, but this is what really helped me grow my business is I literally wrote out, like, if I quit my job, what's the worst thing that will happen? Okay. And maybe I have to move back in with my parents. Okay. I can do that. Maybe I have to get a waitressing job. Okay. I could do that. Maybe I'll fail in public in front of everybody. I'm like, sucks. But I could do it. And then putting my fears on paper, I was like, okay. That's not that scary. I can handle it, so I'm gonna do it.

Mike DeHaan: [36:17] Yeah. I think they call that fear setting. I think that's I heard about that on, was it Tim Ferriss, a long time ago. That was actually one of my first exercise that I did as well when I left my engineering career back in 2018 was like going through all the worst case scenarios for that. And I think that's that's a really good tip. It's really, really helpful for people that are afraid of the unknown like that. That's good. So awesome. Cool. Alright, Grace. Last question. Where can people find you, follow you, and reach out to you who like to do so?

Grace Gudenkauf: [36:49] You can find me on Instagram at grace dot investing.

Mike DeHaan: [36:54] Perfect. You wanna plug anything for WIRE where they can find out more information about that?

Grace Gudenkauf: [36:59] Yeah. If you wanna follow WIRE, it's wire.community, and WIRE has two i's.

Mike DeHaan: [37:04] Two i's. Perfect. What does that stand for? Women

Grace Gudenkauf: [37:07] Women invest in real estate. It's true.

Mike DeHaan: [37:10] There you go. That's just

Grace Gudenkauf: [37:11] So that's why we just say wire.

Mike DeHaan: [37:12] Yeah. Right. There you go. Perfect. Awesome. Well, Grace, thanks so much for on the show. I really, really appreciate you taking the time. And I'm sorry that I spent half the episode saying the wrong freaking group. Yeah. The competition.

Grace Gudenkauf: [37:26] You for having me. This was fun.

Mike DeHaan: [37:27] Yeah. Yeah. I really appreciate it. So, guys, please go and give Grace a follow and reach out to her on her socials there. She posts a lot of great stuff and is super, super active in all that she does there. So you should give her a look. And if you are interested in wire, you should give that a follow too. And if you're a white dude like most of people that listen to us, you should have your wife go and check out wire because she might be a great candidate for it. Your wives, your daughters know your business partner, anyone else you know, I'm sure there's someone that would love to get involved. So anyways, guys, thanks so much for listening, and we'll talk to you all next week. Thanks

Speaker 4: [38:02] for listening to collecting keys. Drop us a five star review on iTunes and send us a screenshot to Mike@collectingkeys.com for your chance to receive a free collecting keys t shirt.