Karen Malsbenden is one of our FlipSisters doing the thing! She's a teacher located in New Hampshire and just completed her third flip, profiting around $85k.
A teacher with a side BUSINESS (NOT hustle) that generates an incredible profit and allows her to fulfill her passion.
This is what we discuss in this episode:
...and so much more!
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Debbie DeBerry | The Flipstress®
Leaving people and places better than we find them.
You're listening to the flip houses like a girl podcast where we educate, empower and celebrate everyday women who are facing their fears, juggling family and business, embracing their awesomeness and wholeheartedly chasing their dream of flipping houses. Each episode delivers honest to goodness tool, tips and strategies you can implement today to get closer to your first or next successful house flip. Here's your spiky haired breakfast taco loving host house flipping coach, Debbie DeBerry.
Debbie DeBerry 0:39
Hey there. Thanks so much for hanging out with us today. So this episode is a little bit different, because it's not necessarily her first flip that we debrief. It is her third flip. It's her first flip with us inside our program. But it's her third flip overall. And the conversations a little bit different. So we talk about first of all new kids on the block, because why wouldn't we?
Debbie DeBerry 1:09
Then we also talk about the feeling of worthiness, when it comes to making a profit on these projects, particularly when they are big numbers, right. And we also talk about the impact of messaging as kids, right, like the things that we heard, and then we talk about the projects that are currently on her plate. So this is a great episode. You're gonna love Karen. She's awesome. So let's just go ahead and jump into her introducing herself.
Karen Malsbenden 1:48
My story I grew up in a very small town, my graduating classes like 98 kids, but I ended up getting a basketball scholarship, full boat to Iona college. And so I went to school in New Rochelle, New York. And after that, I got a job. My first job was right on Wall Street. I don't even know how that happens. But I survived. Um, yeah, so worse. I worked in New York for a while and then I just kind of got sick of I wasn't me, I wasn't saving any money could not save money. Okay, just like I love the city, but I need something else. So then I moved out to Denver. My friends from college are out there. So to Denver, got my master's in education, and started teaching English as a second language. I loved that job. Then I got married, my husband was playing overseas. So I was going back and forth between Denver and Europe. So I've lived in France, Germany, Switzerland. We did that for a couple years. So I had that cultural experience. Yeah. And obviously, I'm obviously but I found myself checking out designs over there, like their interior designs. Oh, so inspirational. I'm sure what an awesome, awesome experience to get to see all that. Yeah. So I didn't even realize that was happening while it was happening. Yep. But I finally was like, you know, I need to, I need to get a job. So I came back. And I
Karen Malsbenden 3:20
started teaching sixth grade social studies. And I also coached a Girls Varsity Basketball Coach, team for six years. And while that was all going on, you know, I was dabbling in real estate. And just recently, that's when I just went like, I got I got a I, I need to do this. I need to stop just dabbling. I just need to go full speed ahead. Yeah, started in 2008. And I just randomly drove by a house in Portsmouth, New Hampshire. And I somehow got into that house that day and convinced my parents to back me on the renovations, and I ended up renovating it from the like, everything might as well been a new house, even though it was historical. But I held it for 10 years and rented it to pay off all the equity. But at that time, I was living in Europe too. And I was starting to teach. So it just worked out holding it for that long was a great choice for me. But then I sold it and I've taken that money and started doing more flips. So that's how I got my back. When did you sell it? I sold it in 2016. Oh, nice. You had nine eight nice years of runner. Yeah, yeah. Yes. So I did really well with that. So I've taken that money and just kind of put it into each property. But I also got into rentals because I was living my husband played professional basketball over in Europe. So coming back into finding short term rentals was really hard, especially furnished. So we ended up buying a three unit, which I live across from now. But um
Karen Malsbenden 4:58
yeah, so I've had that for
Karen Malsbenden 5:00
About 10 years now. And then we live this is funny the current house I live in was actually rehabbed by New Kids on the Block. Wait, I'm sorry. What? Yeah. So Jonathan is into real estate. And at the closing, they're like, Oh, really? Sorry. Jonathan can't make the closing. He's on tour, but I thought he meant they meant military tour. And then I started putting all the pieces together. And I was like, running around my new house like, yeah, like a teenage girl. Like, my husband was fairly annoyed. But that
Unknown Speaker 5:35
that is hopefully Yes. So for for me. It was Joey. It was Joey McIntyre. For me. Yes. I just went to a concert actually, Friday, last Friday. So so funny, but I'm friends with the contractor. So he's been like, you know, every he did a project up the road from us. So I would walk by and stalk him, essentially, and try to figure out how this worked. So he gave me advice, but we're still in touch. But anyways, I have a three in it. I have a four units of a condo in Dorchester mass, and I just finished my first real successful flip out of Ryan, New Hampshire. Why don't you walk us through how you found this one?
Karen Malsbenden 6:19
Um, well, my strategies so far, because of teaching and having other
Karen Malsbenden 6:26
responsibilities, I strictly have been using them LS up, so I check Redfin, and realtor.com. As well as the updates my realtor sends me daily, like morning, sometimes at lunch and night. And I really started to pinpoint areas where, you know, obviously, houses were selling pretty quickly. And then I would also track the days on the market. So this particular house sat last summer and I just kept watching it and watching it until the price kept dropping and dropping. So I was like, Okay, it's time to go check this one out, and I don't live far from it. So I would drive by it. And you know, keep going back to look at the pictures to see how much work it really needed. But um, I just do a lot of tracking on the MLS. So I found it and I
Karen Malsbenden 7:21
it, it dropped in price. So what I did was I went to and reviewed it, but I put my cards on the fact that it was going to need a new septic system because the septic,
Karen Malsbenden 7:34
the septic system was
Karen Malsbenden 7:37
an older retired teacher lived there, she must have done an ad. So I'm like this house definitely needs a new system. So what I did was I did my numbers, and I went over asking, but I put the price of that
Karen Malsbenden 7:52
septic into my numbers. So I went above asking as much as I estimated the septic system. And I was betting on nobody else putting an offer in was going to do that they were just going to go into asking, right. Um, so they ended up accepting my offer. We did all the inspections, and sure enough, it needed a septic. So we negotiated the price back down. Gotcha. Yeah. And I was able, I was able to get more money off just because of plumbing and electrical, and so needed a radon system. So I was able to negotiate the price even further down.
Karen Malsbenden 8:30
At this point, because I've done all the other renovations I kind of know what bathroom and kitchen flooring. Okay, cost. So I, let's see,
Karen Malsbenden 8:42
I went in at
Unknown Speaker 8:45
Unknown Speaker 8:49
And I ended up closing at 509. So I did a lot of negotiating on the price. Wow. Nice. But that's Yeah, that's what they were, like the ballpark they're asking. Yeah. So I just figured I would go in over asking. So that my macker was enticing. And you know, I told them that, you know, I was keep the integrity of the house because in that area A lot of people come in and they just bulldoze these old houses and they build these big mansions that and there's there's kind of a traditional feel in the area that coastal New England feel. Yeah, so I was like, I just need to keep this house looking the same. And I was really proud of the interior decisions I made because this lady was a teacher. And I wanted she loves blues. So that's why I picked a lot of blues. And I just I don't know, I wanted all the fields for her. Yeah, that's awesome. Did she see the finished product? No, she passed away. No way. Are you Yeah. Yeah. But that's why I was even more important for me to keep going with the decisions I was making. Yeah. Oh,
Unknown Speaker 10:00
My gosh. Okay, when did you close on the purchase? I closed? When was that? So it would have been, it took about six months to renovate. So I think in November, early December, okay, so, six month renovation, I'm guessing you put a substantial amount into the renovation because well into the repairs in general, because I bet the sewer system. I mean, the septic alone was probably how much was that?
Karen Malsbenden 10:31
That was just over 20.
Karen Malsbenden 10:34
But the other thing was, is that the house already came with
Karen Malsbenden 10:40
that, no, it did not come with a design. They got the design for me before I closed.
Debbie DeBerry 10:45
Karen Malsbenden 10:47
I can't remember how I worked out one.
Unknown Speaker 10:53
Yeah. Yeah. So I was able to get that all sorted out. So what, what was your renovation budget? Going into it? Like, what were you thinking it was gonna be? About 125. And it was Oh, okay. Yeah. Yeah, that include crude, the septic septic electrical, plumbing. And I'm holding, holding costs, because I financed it through a traditional mortgage. Okay, so that's, that's what I was going to ask. So how did you finance it through it? Oh, because you got it off the MLS? So you weren't having to do like a quick closing? Yeah, yeah. Okay.
Unknown Speaker 11:32
And how So did you qualify? qualify yourself as, like, being a teacher, you qualified yourself to get this loan for this property? Yeah, I had to do all of the, you know, the due diligence with the income statements and bank statements and all that. So that's the bummer. But once you get it done, um, it works out. I have an awesome lender here that she does not
Unknown Speaker 11:59
penalize me for having it for such a short amount of time. I was gonna ask Yeah, cuz that's usually with traditional loans. Yeah. Because usually they the person, the lender gets hit on that the broker gets hit on that. Yes. So that was like one of my biggest concerns, but we have that discussion right out of the gate. Like, don't worry. Yeah. Oh, good. I'm so glad you had that conversation. Because that's when when I realized that that was a thing. I didn't know that was a thing early on. And when I realized that was the thing, I was like, Oh, my God, I'm so sorry. I had no, I had no idea. Right? Like I didn't know. Um, okay. So you bought it for 509. You put about 125,000 into it for the repairs and carrying costs and all that jazz. And you ended up selling for 765? What did you Okay, before when you closed on it? Like in November? Yeah. What were you thinking your ARV was going to be? Was it about the same? All seven? No. 720? Yeah. Okay. Okay, so 720 which, awesome. Okay.
Unknown Speaker 13:09
So then you obviously report comps, when you go to list? Yeah. Do you have an agent that you work closely with? Yes. Okay. She's amazing. We make a really great team. So pretty psyched. Yeah, I'd love to hear. And also I'm just since we're talking about her, I don't know if you remember, I was asking the question about the Commission's because I was kind of upset. Yeah. So she ended up going with the 4%. So that's like our deal from now on. So I'm pretty psyched. Yes, yes. huge. It's huge. We're able to work that out. So I was pretty psyched. Awesome. I love that. I love that I love when it works out like that. And I mean, I was always willing to negotiate with with clients that I worked with over and over and I worked with dester solidly for two, almost three years. And of course, like multiple deals, repeat business. Absolutely. You're gonna reward Yeah. And I have the habit of not getting into difficult conversations. I kind of sidestep around them. So this one was awkward for me. But I did it. Like okay, thank God.
Unknown Speaker 14:14
I hear you. I'm, I feel the same way because we build it up to be like, it's going to be one thing. Like it's going to be so combative, and they're going to be offended. And then they're going to get mad at us and oh, all this stuff. And then none of that. makes this leave bags under your eyes and then you're like, exactly, okay, we're the same person. Yeah. Okay.
Unknown Speaker 14:38
Oh my gosh. Okay, so those numbers are big. What was your profit? About 85,000. That's amazing. As a teacher, right doing this on the side, like that's, that's huge. And mind you I wasn't expecting that. It just happened to be how the market went. So I had
Karen Malsbenden 15:00
To push a little to get the work done, I was starting to get very nervous because we were getting into
Unknown Speaker 15:06
like mid June Yeah. And I'm like this cannot wait another week because houses are gonna start getting on the market. So I pushed my contractor pretty hard to start getting stuff done. My husband and I do a lot of the work ourselves to so you do weekends. Yeah, we do that time I love to tile. And I, you know, I painted some of the rooms I had another friend who paints professionally, she did some of the rooms. But yeah, we're very hands on. I'm working on not being that hands on just because it's all it's a lot. But um, I don't know, it's my grandfather owned a hardware store. So it's in the blood.
Unknown Speaker 15:47
I get that. It's, it's there's a fine line between it being a job though. Right. another job. Yeah. requires you to be there all the time in order for things to get done. But it's also fulfilling like you also enjoy it. So I get that 100% Yeah, I totally get that. Do you? Okay, so your husband? You said he was a professional basketball player before? Was he doing now? Yeah. He works in it. He manages a global team. And it Yeah, way different than running a basketball court. So that's cool, though. That's super cool. I know you play basketball in college, right? Yeah, I played it on, Your Honor.
Karen Malsbenden 16:24
So that's where we met, and never knew it'd be flipping houses together. But it works.
Debbie DeBerry 16:32
Yeah, that's amazing. Okay, so you found it on the MLS? We went through the numbers, we went through how you financed it. Okay. So actually, let's talk about the financing a little bit more. So you got a traditional loan?
Unknown Speaker 16:47
Meaning conventional financing? Yes. And did you were you able to finance the purchase in the renovations? or How did that work? Yes, because of that. The profit that I made from that rental, the rehab rental enforcement, I've been kind of saving up because I just I don't know, my dad was like, don't
Karen Malsbenden 17:10
don't depend on other people to finance you, so to speak. So I try to do a lot of financing myself. However, I am learning through your models, I need to start dabbling into hard money lenders, the only thing that is making me nervous is the timeline. I think if I wasn't teaching, I would feel more comfortable. But because I'm consumed in the classroom for a big part of the day. It just takes a little bit of stress off of me knowing I'm not pigeon holed into these dates and draws the draw schedule to gotcha. So but once I did ask one of the lenders that I work with, I started working with one in Maine just recently, I said, Can you just look and see if I can retire from teaching. He said I had to put one more year and so are you. Are you going one more year? Yeah. Yeah, we start next week. Yep. All right. So Oh, wait, the for the for the conventional financing. Did you? So you just did you get a loan for the purchase amount? And then you finance yourself? The renovation part? Yeah, exactly. Yep.
Unknown Speaker 18:16
Okay. And then, did you act as I know, you do some of the work yourself you like doing like doing tile work and some painting? Do you act as the GC? Or do you hire? Like, Are you hiring a contractor who's I basically am the GC GC, the person I worked with on this project was really good about it was kind of like a coast. So um, but I I am having so I don't want to say guilt. That's not the right word. But I just need to make sure that I know how much I appreciate his help with the CO ownership, I guess, of this project, because he didn't upcharge me at all. So I'm trying to figure out at this point, what I should do to kind of keep them in my circle of trust. Yes, it's huge. It's huge. Having people like that, when we are able to build that team around us. And sometimes people hear that think, oh, we have to hire people. That's not it's not hiring at all. It's you know, aligning ourselves with other businesses, like the real estate agent, that right that you have a good relationship with, that you trust, like the this guy, this contractor who can do some of the work and you trust him and he he's good with the numbers. That goes a long way. Like just having those people that you can rely on and that you you can trust in you know that they know their stuff. It's it really is invaluable. I totally get that. Yeah, it makes it more fun to because there's less stress. Yes. And this is the first clip that I've had that. What's your favorite part of the process? Is it is it doing the work? Is it or is it a combination
Karen Malsbenden 20:00
have everything or What's your favorite part to finish? it start to finish? Yeah, yeah. I love teaching. But I think this is my passion. I'm just struggling with the fact that, um,
Karen Malsbenden 20:13
I guess, you know, when you tell people you flip houses, but you're a teacher, they see more valuable in the classrooms and
Karen Malsbenden 20:21
like flipping houses to some people, it feels a little artificial. But for me, it's not like when I walk into a house, like I hear you say, I get the vibe. Yeah, I truly get the vibes. And I like to make sure that I keep the integrity of the family and the integrity of the house, but also give people a new living experience that they can also enjoy. And I really don't think there's anything wrong with that. Yeah. While you're making money, right. And
Karen Malsbenden 20:51
yeah, so but that's kind of a struggle because, you know, and in teaching, you're on a, I guess, fixed income, so to speak, you know, there's no bonuses. There's no and I'm not complaining, right, but it just feels a little strange. Like for me, this last one feels a little strange. Yeah, I guess making such a profit. Yes. So I am.
Unknown Speaker 21:14
I don't want to use the word star though. I'm sorting it out. Not Not Not feeling guilty about Yes. Yes. And, and, and accepting it and being okay with it. Like, Oh, my gosh, that's a whole thing. It's a whole thing. Do I deserve this? And why? Why do I deserve this? Why doesn't someone else deserve this to someone else? deserve it more? Yeah. How do I pay back the universe? for this? Yeah. Uh huh. Yeah. Yeah. And, you know, it's nice. Going back to her number. I was at my grandparents house, my grandmother used to get Better Homes and Gardens, magazines, and, and I would slip through them like nobody's business, I would be excited to get there and see what new magazine she had. Right. And I was, you know, one of my family members asked, What do you want to be when you grow up? I must have been like, eight or nine. And I said, I think an interior designer. And they said, Oh, no, you can't do that. Even make any money, you should just, you know, go finish high, you know, finish school, get your degree get into the classroom. So I that was ingrained into my brain. So now that I am actually doing this and people are seeing that I'm successful in doing it. It's a bizarre, they're very proud of me, but it's a feeling. Yeah, I get the most like, I can feel them looking at me being like, I can't believe you're actually doing this. Like I am. Yeah, I am. Thank you. I told you I was I told you when I was eight, what I was going to be doing
Unknown Speaker 22:53
so but it's it's funny how what people say when you're that young really does give an impression. So when I'm in that classroom, I make sure I tell you know, tell my kids dream bag. Oh my gosh, thank goodness, thank goodness, you are saying that? Because you might be the only person saying that to that to that kid. I mean, really? Really? Yeah.
Unknown Speaker 23:18
So it's huge. The messaging is huge. It's interesting what we what words we do latch on to as kids and you know, the ones we carry and you know, 40 years later we're like, Ah, that's so weird that that's that's the thing, right? That's the theme that stood out and that's what I decided to carry with me and make mean something and these unwritten expectations that
Karen Malsbenden 23:45
are put on you.
Karen Malsbenden 23:47
So at this point, like we talked about the right house, that's very successful coming up I am closing on a three unit and Elliott name. So that's gonna be a buy and hold. I'm closing on my dream beach shack up in Biddeford which is going to be an Airbnb. And then I'm today I'm just finishing my due diligence with a property in New York, Maine, where I'm going to I haven't decided exactly what I'm gonna do yet, but I'm buying the house and
Unknown Speaker 24:21
there's a lot behind it that comes with it with a separate address. So I'm doing my due diligence to see if that's filled with nice. So if that's buildable, I'm going to do a new build. Yep, and rent the house while I'm building to cover the carrying costs and all of this, I'll sell the house and then or I'll sell the new build, and then I'll start working on the house. Nice. Awesome. I love it when they work out like that. But I would consider myself a jack of all trades master at nothing but trying to master this.
Debbie DeBerry 24:53
Well, I think you've mastered doing the thing, right? you've mastered doing what you say you want to do. That's pretty big.
Debbie DeBerry 25:00
That's pretty big. Um, so congratulations on this most recent deal in the all the things you have in the works. You're awesome. I love it.
Debbie DeBerry 25:11
Thanks for sharing part of your journey. I think it's super inspiring. And like, you're super relatable. I mean, you're a freaking teacher, and you're doing the thing, like you're doing this and you're doing some of the work and you're doing, you're financing it, right, because that's what a lot of people say, Well, I'm a teacher, I can't do this. Nobody would ever bet on me. Well, you got to bet on yourself first, and then other people will bet on you. But if you're not willing to bet on yourself, yet, that's gonna come across. Thanks for being here. I'm so glad you're here. Hey, you're awesome. I'm so glad I found you. I am too. I am too. I'm so glad we crossed paths. And yeah, I'll see you in the group. As always, yeah. Bye, Karen.
Debbie DeBerry 25:51
I loved it. Thank you, Karen. See, we're just everyday people doing something we love chasing something that lights us up. So if that's something that you want to do, and you're not doing it on your own, you've been sitting on the sideline for way too long, and you are sick of being where you are, and you're ready to make a change. Right? Remember, like I said earlier? If you're not willing to bet on yourself, why would anybody else, right? So when you have a spouse that doesn't support you, or a partner that doesn't support you, or family members, or whatever? Why would they if you don't take yourself seriously, right? You have this big dream, and you're not chasing it. So if you want some help, this is literally what we do day in and day out, is help women start and grow house flipping businesses they love. If you want to see if we're a fit, go to her first flip calm and follow the instructions and we can see if we're a fit. Alright, so until next time, we people in places better than you find them and make it a great day. Bye, y'all.