Hands-Off Multifamily Investing: How To Put Your Income On Autopilot While Living Abroad With Becca Hintergardt

 

Do you want to travel and live abroad? Maybe in one of the blue zones around the world? That’s possible if you know how to put some of your income on autopilot. Maybe you can rent out your primary residence and earn passive wealth that way. There are a lot of ways to do this with real estate. And if you’re new, don’t be afraid to partner up and learn from them. This is a team sport anyway. Join Lisa Hylton as she talks to multifamily investor Becca Hintergardt about the method she used to move to Costa Rica with her family. Learn how to autopilot your income so that you can control more of your finances. Discover how to house hack and use your primary residence as an asset. Also, find out how you can get started in this multifamily space by being a limited partner. It’s all about the partnership after all. Listen in so you can live in your dream destination abroad.

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Hands-Off Multifamily Investing: How To Put Your Income On Autopilot While Living Abroad With Becca Hintergardt

I have on the show, Becca Hintergardt. She brings to the multifamily space a successful sales career in medical device sales at a leading Fortune 500 company, as well as valuable multifamily experience. The reason I have her on the show is that she has been able to build a life for herself that has entailed being able to travel and live abroad. She lives in Costa Rica and has a passive income.

For many people, that is the dream. In this episode, we are going to talk about how she has done that and what are some of the investment strategies she has taken that she has played with to be able to generate streams of income that enabled her family, husband, children, and her to make this dream a reality. Becca, welcome to the show.

Thank you, Lisa, for the warm welcome. It’s such a pleasure to be here. We have been friends for a while. It’s a delight to finally be on your show. I appreciate it.

It has been. We have met for a good while now. I continued to be in this space of multifamily and real estate investing. You are now living in Costa Rica. Let’s get kicked off here. Where I want to start with this is can you talk about the genesis? What inspired you and your husband? Can you remind me how old your children are?

They are in 6th and 7th grade.

You and your husband made this move in 2021 from San Francisco to now living in Costa Rica? Many people are like, “I would love to do that. How do I get my financial house in order to make that a reality?” Could you talk about what inspired you and how you have been able to get this done?

I can help your readers with this journey. I will first start by telling you that it’s not as hard as you think. We are not independently wealthy. Many of the families that you find overseas are not independently wealthy. You find a lot of retirees, digital nomads’ families, absolutely doing this. Many of them live off passive income. In our case, it’s passive income from our favorite topic, multifamily real estate.

I will tell you where it all began. Essentially, my husband and I were medical device reps from the San Francisco Bay Area. During the pandemic, we said, “This is not working for us with this Zoom schooling for kids.” I looked on Airbnb one day and said, “Do you know how much we could get for this house if we rented this out on a per-day basis on Airbnb?” You had all these people leaving San Francisco proper.

We are right over the Golden Gate Bridge, North Bay. I said, “Do you know how much we could live on a tropical island for and live off that Delta of the money?” From there, the quest began. It took us about six months in lining things up but we ended up doing it and moving to Nosara Costa Rica, which is a boutique surf yoga hub in the Pacific of Costa Rica. It’s one of the Blue Zones of the world.

What are Blue Zones?

I believe there are six of them in the world. It might be a little more now, but essentially, it is a place where people live a healthy, long life. There’s the highest concentration of centenarians in these places due to the food, climate, lifestyle, and a number of other factors. Look it up on Google. There are books and movies on it. Where we live in Costa Rica is one of those Blue Zones. It proved to be the case. Our health improved dramatically after moving there. Much of the health conditions are just stress.

Queue up your life in a way that much of it is tax-deductible. Click To Tweet

My husband was on different kinds of allergy medications, and things that they said he’s allergic to olive trees, gluten, and all this stuff that didn’t make sense. Two weeks in a Blue Zone of the world, all that stuff was gone. We didn’t need $300 in medication a month anymore. It was a dramatic life upgrade in that sense in terms of health, quality of life, and the time that we have for the kids. That’s all good if you can support yourself. You don’t want to live in a grass hut on a beach dead broke.

You can see a picture of Becca’s backyard, which is a gorgeous pool and beautiful garden. This is your backyard in Costa Rica.

Right behind that wall is the beach. You can throw a rock on the beach. There’s nothing that separates us and the beach except for that wall right there. It has been a tremendous life upgrade. The big thing here was, how could we do this? How could we queue up our life and stitch our income together to do it?

Let’s get into that. What did that look like? You said it was six months between you proposing that and you then making the decision to go to Costa Rica but I’m assuming there must have been some investing going on. How does the finance, money or income work?

First of all, the six months part of that was getting rid of things. It’s easier if you don’t have a big house you’ve lived in for a long time and a bunch of kids’ stuff. Much of that six months was just purging things, selling things next door, and queuing up the finances of it. I have been in multifamily since 2004. I did my first house hack in San Francisco. I lived in the upper unit while I renovated the lower unit, then I lived in the lower, renovated the upper, and then lifted up the Victorian building. I put a garage underneath, blew out the backside, put steel beams, and all this crazy stuff I would never have energy for anymore but it cashflows.

That kicks off a good stream of income for us. That was one of the little things we stitched together. I’m an LP in hundreds of units in Texas. This is a Limited Partner where I sit back and have the operators take care of the deal for me. I get paper losses every month or every year in negative K-1s. That’s nice. That was another part of it. I’m a multifamily syndicator.

What I do is vet deals for myself and my investors and then bring that money into apartment building deals. We all share in the benefits of that. We have a hotel conversion deal that we did, and that’s a fun deal but essentially, we bought this 100-unit quality inn motel. We are converting it into 65 units of multifamily. This is in Arizona. It was during the hotel apocalypse at the beginning of the pandemic.

We got this property for $0.30 on the dollar or a 70% discount. That’s still gearing up. That’s one of the ones that we are stitching together. For your readers that are saying, “I don’t even have that,” your primary residence could be a big part of this. It is for us, and it can be for you but that’s a big chunk of it too because once you move out of your primary residence, it’s no longer a liability. It then becomes an asset because it’s kicking off money for you.

It also becomes a tax deduction. The key to this is to queue up your life in a way that much of your life is tax deductible. What do I mean? In renting out your primary residence, do you know the renovations of that house are preparing it for rental? You need a new kitchen, bathroom, and floors. It’s tax-deductible. When you come back to visit your property around Christmas and the holidays and see your family, those trips are deductible because you are coming back to visit your assets, so then your flight home becomes tax deductible.

Did you do a long-term rental for your home or are you short-term renting those?

We looked at both but for the duration that was here and continues to be in Costa Rica, long-term made more sense. We thought, “Maybe we will just throw everything in storage,” but that gets quite costly too. What we found was a better thing to do was to buy the largest studio shed we could for the backyard. We sold a lot of big things like beds, couches, and stuff like that and then put everything else in this studio. The break even on that was eight months. We would have been paying the same as storage. It made more sense financially to do a studio shed like that and then also increase the value of our property because it could be used later as an office and has greater sellability later.

 

Before we move off of this and go into the investing, hotel conversions, asset classes, and all that stuff, stay on the topic of the traveling part and people who want to take this path. Looking back, what would you say are some of the things that you’ve learned that you would share with others who are interested in moving abroad like going to live in a Blue Zone, be it Costa Rica or elsewhere? What are some of the things that you think are instrumental that they need to put in place?

First of all, start with a good vision and create your bucket list of where you would like to live. What’s the destination? Don’t let things get in the way like you’ve heard that it’s expensive or hard to get a visa. Start there as your dream location. Look at your life and say, “Can we put any of this income on autopilot?” It’s an essential part of it. You’ve got to be able to fund this.

What many people do is they often go to these locations and take their job with them. They will find out that often there’s a currency arbitrage that your cost of living is less there. Perhaps you don’t need to work as much as you do living in the US. Perhaps you could take your US job, work part-time there, then rent out your primary residence and a couple of other things to create that income.

Do that. Start with the destination, then look at your life and your job. Can you put any of this on autopilot and lessen your hours at work? Usually, you don’t want to go into living abroad and seek employment in those countries. It’s best to secure a US job before you go or keep your job and do a lesser version, lesser hours. Get on any blogs and meetup groups or websites you can to learn about those places.

Once you whittle down that bucket list, you want to write maybe 3 to 5 places as your dream location you like to live. Start whittling it down from there. Once you have it in about 2 or 3 of those destinations, start joining groups on Facebook. You will hear quite a bit more from ex-pats and what it’s like to live there.

What about finding places to live? I’m sure that was an adventure in itself.

It turns out we landed here in a housing crisis, come to find, it seems that many other people in the world decided to leave it all behind and go live on the beach in Hawaii, Lake Tahoe or Colorado. Places that were not crowded before did become crowded. They were limited in their inventory because they weren’t prepared. We landed here in Airbnbs. We thought, “We’re going to stay in an Airbnb for a month or two.” I had two of them booked in different areas of Nosara Costa Rica, on different sides of town, which I highly recommend doing. Jumping around a little bit, so you can test the areas. Don’t lock in something for a twelve-month lease before you get there.

It’s better to be boots on the ground and decide where you want to live while you are there. We thought we would find long-term housing quite easily when we arrived but it turned out many of our ex-pat friends that we made were jumping around houses every 60 to 90 days because there was a constricted supply. We’ve moved around a fair bit. We’ve become comfortable with it because we’ve gotten to know all different areas, and we are traveling light. We have a couple of suitcases and a laptop, beach wear, and you don’t need your winter coats or your shoes. It’s tank tops and skirts all day long.

Your children are now homeschooled. How does schooling look for your children these days?

That’s a great question because everybody wonders about that. Don’t start this as I started it, saying, “I’m going to leave it all behind and live in the remote part of Costa Rica. It’s going to be great.” I then said, “There are no schools here. Hold on. I better back this up a bit because I certainly don’t want to homeschool, which is what we left in the Bay Area.” If you have kids of school age and you intend them to be in school, start with the school, and then you go back into your areas from there.

Our kids go to an international baccalaureate school in between the jungle and the sea. It’s amazing how their monkeys swing from the trees. We drive them to school in the morning, and there are some wild horses that run around. My son got bit by an iguana. He was feeding an iguana, and the principal had to call me, “You are not to feed the iguanas.”

When you're living in the Bay Area, you see the same things every day. But when you go somewhere new, everything's an adventure. Click To Tweet

That sounds like it’s definitely an adventure but I feel like you are very much living your dream.

We feel we are much more full of life here than in the Bay Area. You look around, and when you see the same thing every day, it dolls the lines of things. You don’t notice the flowers and some of the trees. You just walk by it. When you go somewhere new, everything’s new. The kids are even pointing out, “Look at that beautiful flower way. Look at the monkey eating that mango upside down.” It has been a big life refresh.

At this point, I want to pivot back into the finances and, this time, on investing specifically. You spoke a lot about multifamily. You are a focus there, and then you also mentioned the hotel conversion. Was the hotel conversion the first asset class you did outside of multifamily?

Yes, but we are making it multifamily. It starts as a hotel, and it is a multifamily.

As people think about it, one of the key aspects of being able to travel, live abroad, and all that stuff is getting your finances in order, one aspect of that is investing. Obviously, you can continue to earn income through working and stuff like that. On the investing side, your investment of choice has been multifamily either house hacking from back in 2004. As people think about investing in multifamily now, to achieve this, what would you share with them in terms of how to create that stream of income from multifamily investments?

First, start with what you have. Look at your stock accounts and what other cash you have laying around. Are your stocks loving you back as you love them? In our case, it was absolutely not. Let’s sell that off and free up some money to look into. People say it’s the alternate asset class of real estate but I would beg to argue that this is the original investment, the original asset class. This is where it all began.

Real estate was around and with Land Barrens far earlier than stocks were around. Start looking at the original investment. If you are interested in the multifamily space, look around online and partner yourself up with people that are doing this. The best place to start is as a limited partner in a deal just as I continue to do. I’m probably 60% limited partner and 40% co-GP, General Partner.

Starting learning about it from a backseat is nice to do on a limited partner basis. You could do that by going to some of these meetups, doing these online Zooms or seeking people like you and I that know all the sponsors, the people that are finding the deals, and that are boots on the ground. We take the best sponsors and deals of those sponsors because if you ask a sponsor, “What’s their best deal?” They will tell you there are certainly better ones of the law.

We like to pick the best of those and then underwrite those yourself. Make sure all the rent bumps are as correct, all the due diligence is being done in a proper way, and then bring our money in as a group on type of investing. To your readers, if you are interested in the multifamily as one of the prongs of your passive investing, approach it in that way, find people like myself or Lisa that could help you with that, and ride along with them in their journey.

One of the things that are a topic of discussion is the market. You have inflation and higher interest rates going on. Many are asking, “Is this still a good time to be investing in multifamily assets?” What do you say to investors who are feeling that way about the market?

In inflationary times, rents go up. Multifamily properties are based on the value of the income, essentially the value of the rent, the then operating income. Multifamily properties, in particular, have done very well in recession times. I would give it a thumbs up in that case. I would look a little bit more harshly at office space, retail, and things like that in times of recession. In multifamily, I’m not as concerned. The interest rates are playing a small part in this as well but sellers are starting to become a little more realistic with their pricing.

 

Building from there, as investors continue to look at building out their portfolio and investing in multifamily, you’ve mentioned getting to know some of the sponsors. Are there other things that you would also share or things that people should be looking at when a multifamily deal is presented to them to invest in?

I would look at the market. What markets do they like? Are these emerging markets? Years ago, I was in the RE Mentor Program back in the 2000s. The one takeaway from that group was that they invested in emerging markets and what these areas were where there’s population growth, job growth, positive migration, landlord friendly states. I’ve had a couple of deals in crash test dummy of real estate investing over the years and doing things on my own and out there as a lone wolf in investing in markets where maybe the deal wasn’t very good but the market was. I had this twelve-unit in Kansas City, for example. I did it on my own with my IRA.

I was the lone wolf out there for being a single owner. I had estimated this was in the path of progress, this particular deal. I thought it was a C-plus property. It was probably more like a C-minus and one block away from a B area. The path of progress just needed to move one block but it never happened in my timeline and became a management nightmare. This was early on in my investing.

The one thing that saved me from this was the emerging market. Kansas City had a job and population growth. All the indicators were heading up. That same property on our women’s multifamily group, one of the other gals was bidding on it. I bought it for $250,000 and sold it for $300,000 three years later. She’s bidding $925,000, and there were twelve offers on it. This is the power of a market that’s on a positive trajectory.

When you look back, do you feel like you could have waited as long as you needed to get for the value of it to increase from $900,000 to almost $1 million?

I don’t think I could have hung out that long. I had a 3 to 5-year plan.

You said that you have been in the multifamily space since 2004. Granted, you did have your own property in San Francisco, as you talked about in the beginning, living house hacking and essentially building it all out into a multifamily of its own. When did you get started investing in the syndications like being an LP, and even if you didn’t do syndications? The twelve-unit in Kansas City, was that your first foray into multifamily on a larger scale?

That was my first foray into out-of-state real estate investing and multifamily. It was not syndication. I was just a lone wolf buying this with my IRA. That would be one huge takeaway. This is a team sport. These are such big deals that you need a lot of people involved. Don’t try to do this alone. The power of a team is much stronger than what you could do on your own.

That was my first multifamily out of state and then about. During those years too I’ve done lots of passive investing. I stepped out to multifamily for a little while because my kids are eighteen months apart, the Irish twins, and then got back in. I started back then by doing different passive investments that have been bought and sold over that time.

You’ve had passive investments that have also gone full cycle. What would you say about your experience investing in passive deals some of the things that you’ve learned that are either red flags or things that you watch out for that investors should also be looking at as they think about getting into this space investing?

What I would say to investors getting into this space is, first of all, don’t try to vet all these deals on your own. Hook up with somebody who can help you because there’s a lot to consider here. I will give you an example. My first LP deal went sideways. I’m definitely the crash test dummy of real estate investing. This is great to know because you read all these rosy stories. I don’t know why people don’t share many of the hardships of it but it is an amazing space and the key to financial freedom, in my opinion.

Real estate investing is a team sport. It's better to team up with somebody that can be your guide and shorten your journey. Click To Tweet

There are bumps on the way and bumps that could be avoided if you were to partner up with people that can help you. In this first deal, I didn’t. It was 149-unit in Texas. Some key things went wrong there that I should have checked. One of the big downfalls of this property was that the city was planning a huge public works project in front of it, a big sewer line replacement. This is a huge street with three lanes on each side. When they finally got around to it, it took longer and cost more than they thought.

To get into our property, you had to cut across two lanes and make a quick right, and almost flip your car to get into the driveway. That came right at the time of our lease-up. People that were living there were moving out, let alone trying to rent it. We struggled tremendously in that. That could have been resolved if we had checked the public records.

Do you remember in Rich Dad Poor Dad, Robert Kiyosaki was going to buy a condo in Honolulu, and his rich dad said, “Did you know that there’s a huge sewer replacement public works project right in front of that building? It’s going to be hard to get into the building. People that are living there are going to want to leave. City projects always take longer than you thought. They cost more than they thought and often have to go back for funding, then the project’s delayed?” That’s exactly what happened in Rich Dad Poor Dad. It’s exactly what happened to us in this deal. In the case of Robert Kiyosaki, he ended up not buying that condo, buying one a little down the way, then going back eight months later and buying that first one in foreclosure for half the price.

It happened to the deal that you had been invested in in real life.

It is exactly the same thing that happened to us as what he described in that book, and the sponsors didn’t check if there were any public works projects going on. It dramatically affected the deal. The second thing that was a big whammy there was the ADA, American Disabilities Act, in renovating the clubhouse in adding a bathroom.

It ended up costing a whole lot of money that they didn’t anticipate because of those ADA regulations. There are these little nitty-gritty things that if you are a busy doctor and want to put some money in passive income multifamily, it’s a great idea. Partner up with somebody for those first few transactions if you don’t want to get in the weeds and all these little things.

When you talked about the property you bought in Kansas City, one of the things that you said you learned was that this was a team sport. I’m curious about when you look for team members. What are some of the aspects or attributes of a good team or anything you’ve learned about teams and identifying good teams?

It’s key. This is a team sport. You need key members on that team. You need your deal finder and someone that’s very good in asset management, somebody that’s great in underwriting. We have three rounds of underwriting in my group. One of the gals is a CPA. This is what she does all day. She loves spreadsheets. You need partners that can bring in money for you as well.

It’s important that everybody is very good in their role and not trying to do everything. The key for me is that I look for people that I like and trust at this phase in life. I don’t want to work with people I don’t like. Nobody needs money that bad. People that I trust are key for me. Everything else will fall in place after that.

This was so good. Was there anything that I didn’t ask that you think would be beneficial to share before I have you share ways in which people can get in touch with you?

I would say, for your readers, have the guts to go do something like this. The power of travel is transformative. Don’t worry about all these things that could possibly get in your way. You can blaze through all of that. Don’t hang out in the status quo. There’s a whole other world out there. There’s a way to support your life by living in these other places.

 

As you have illustrated with your life for you, investing in real estate, and specifically multifamily, has been a key vehicle that has helped you to create this chapter of your life. One thing I also want to point out to people is that we are here in 2022 doing this interview. Earlier in this interview, you said that you started in multifamily in 2004. You might feel differently about this but I do believe that many people think that this is some real estate investing, syndications multifamily is like a golden bullet that they deploy, and it generates income tomorrow. It takes time. You have pitfalls and go through things that don’t go as planned.

That’s why partnering with people who have experienced things that have gone sideways like yourself can help people to think about things that they probably aren’t thinking about because they didn’t happen to you. You don’t know to ask until you then go through it, it happens to you then you are like, “This is a lesson that I now have to learn.”

You don’t know what you don’t know. It’s better to team up with somebody that can be your guide and shorten your journey.

If readers want to learn more about you, where is the best place they can go?

Come to Costa Rica. You could find me on LinkedIn under @BeccaHint. I have a free guide for your readers. For anybody interested in multifamily and how to pursue this, also a quick guide on living overseas it’s called 6 Steps to Put Your Income on Autopilot and Move Overseas. You will find that at www.HintInvestments.com or you could reach out to me at Becca@HintInvestments. I will be happy to answer any questions and help you with this journey. I talk to a lot of people about helping them how to queue this up and move overseas. This is my favorite conversation, multifamily, and travel living overseas.

This was good and helpful. You’ve dropped so many good nuggets. Guys, if you are thinking about moving overseas and you want to get all your ducks in order, here is your guide. Thank you so much, Becca, for coming on. I appreciate it.

It has been a pleasure, girl. It is good to see you as always.

 

Important Links

• Becca Hintergardt
• Rich Dad Poor Dad
• @BeccaHint – LinkedIn
• Becca@HintInvestments

 

About Becca Hintergardt

Becca Hintergardt brings to the multifamily space a successful sales career of medical device sales at a leading Fortune 500 company, as well as valuable multifamily experience. Becca strives for the uncommon. She currently lives in a boutique surf and yoga hub in Nosara, Costa Rica. Her life in the tropics is largely supported by passive income from her multifamily real estate investing.

Becca’s team is under construction on their newest asset a 100-unit Quality Inn Motel in Arizona that they are converting to 65 multifamily units. The complexities of a hotel conversion process provide her with well-needed challenges to continue learning and growing in the multifamily industry.

Additionally, she has invested in and overseen multiple projects, including a condo renovation/conversion project in San Francisco, a multifamily value-add project in Kansas City, and she is an LP on several buildings totaling over 450+ units throughout Texas. Becca is inspired to help others live an authentic life of passive income freedom and location independence through real estate investing. She invests in multifamily properties in the US and double your money on new construction projects in Costa Rica’s highly sought-after tourist towns.

 

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