Member Spotlight - Cindy and Pete Fischer ...

family often ask them when they are going to quit investing and “really” retire. They tell them that they don’t really have an answer, except they’ll let you know when it happens. In the following interview, Cindy will be speaking for both of them.

Please tell us a little about who you are and what you did before getting into real estate investing:

My business (and life partner) and I have different professional backgrounds. I started working in retail and wholesale food sales. I married and started my family in my early twenties. As a wife and mother, I got my bachelor’s degree in education with the goal of completing a masters in counseling and going into private practice. At 28 years old, I was a not traditional college student. Post-college went as planned; I was an educator, taught high school and some adjunct faculty college courses and adjunct college counseling, and started my counseling in private practice – which included teaching a courtmandated class for divorcing parents. I have my counseling practice and, more recently, have added life coaching to it

Pete would say that his first career started when he was practically in diapers, going to work with his father who was a painter and small-business owner. As the story goes, his mother worked and didn’t want to hire a babysitter, so he and his brother went to work with dad, and they actually worked. After high school, he worked briefly in the printing industry before becoming a union carpenter. He started as an apprentice and learned from several mentors. As he gained experience, he was given more responsibilities and eventually ran jobs, often serving in superintendent positions and traveling to various states. He also learned as much as he could from other trades workers and (before YouTube) from trial and error. He rehabbed several homes he owned and lived in. Eventually he purchased a vacant lot and built his own home, serving as his general contractor as well as doing as much of the work as he could. Later he sold the first property and repeated the process a second time.

As with many people, life events (divorce) resulted in singlehood for both of us. After my children were grown and his were almost in adulthood, we met in the fall of 2006. Though we had quite different professional backgrounds, we had some strong commonalities. The biggest things we have in common are a love for our children and family, being raised in small business/entrepreneurial families, a desire to want to invest in real estate and what I call “passion for the project.” Our discussions often lead to talking about how much fun it would be to invest in real estate.

We started out thinking that it would be great to buy vacant lots on or near water and build homes on them after we retire. This would allow us to travel, enjoy the water and chase a project. After purchasing a few lots, we decided to shift our focus to homes already built and becoming landlords. We felt this plan would help others and build us a nice passive income.

Where is your current market and what is your focus or area of expertise?

We have properties in multiple states. When we decided to purchase existing homes to rent out, we focused on the suburbs of Chicago. We expanded our investing to Florida, Missouri, and Arkansas. We own long-term rentals (single-family and 2-to-4-unit properties), vacation homes, and in 2022, we added a self-storage facility to our portfolio.

As for our area of experience, I would say determination and creativity. They are the qualities that have kept us going and gotten us where we are today. We also have a lot of general knowledge; Pete’s are in the building trades and working with tenants. Mine are the creative deal-making and money management/ financing arena.

How did you get started?

Once we realized that we were both committed to becoming real estate investors, our goal was to purchase five properties. We worked with a real estate agent in our investment areas who worked a lot with investors and purchased auction properties. After we had five rental properties (in about 2012) we kept buying, mostly single-family and 2-to-4-units. We quickly found that investing is a lot like eating a few potato chips: You think you will just have a few but before you know you’ve lost count and can’t seem to stop.

While still working our primary and secondary jobs, we would pack a suitcase on the weekends and head east about 55 miles to where our first properties were and rehab them until time to go back home and to our other jobs. At that time, we did most of the work ourselves, hiring out only what we could not do ourselves. We would sleep on air mattresses on the floor and cook on hot plates and in crock pots if a stove wasn’t in the property.

We often found ourselves purchasing in sets of three. It just seemed like deals didn’t come one at a time, they came in sets of three, so we found ways to get all three. At one point, we decided it was time to see if we could be hands-off landlords (using property management companies). We knew it would not be possible if they were close to where we lived so be headed out of state. We went to Florida and purchased, yes, three houses. We came home for a few weeks and packed up a rented SUV and headed south to rehab those properties. We found a property manager in the area we liked and headed home when we were done. The process of buying and occasionally selling has continued throughout the years. As the number of properties grew, so did the paperwork and off-site responsibilities. My role shifted then to the behind-the-scenes tasks and Pete did the hands-on property work.

Describe a typical work week for you as a real estate investor:

It is hard to think of any week as typical. There are so many moving parts and phases. It is common to start the week with a very carefully thought-out and clearly defined plan only to have a text or phone call change that all together. The plan change could be an emergency repair that needs immediate attention to a new opportunity that we decide to go check out. One week could be filled with bookkeeping and preparing for taxes or clearing out a tenant who left us with a mess and lots of repairs or updating financial statements and rent rolls for a bank. Perhaps the best way to put it in a typical format is that we start the week identifying key tasks that we need or hope to accomplish and then reevaluating each day with the three to five most important for that day. Then hope that nothing takes you off course.

How long have you been investing in real estate?

My quick response is a little over 13 years ago, however, it depends on how we define our start. I purchased a vacant lot in Canyon Lake, Texas, in 2004 as my cousin had gotten several lots under contract but didn’t really want them all so I bought one. I still own it but I’m still unsure of what I want to do with it. Maybe someday we will build there. In 2008, we purchased a few more lots together, also on/near water and have sold two of those. In 2009, we purchased a pre-sold property as a test run for investing and rehabbing. That said, if we factor all that into the equation, somewhere between 13 and 19 years, but who’s counting? The big question we still can’t answer, as with many other investors, is when will we stop.

Tell us about your first deal:

Our first deal after we established our LLC was a four-bedroom, two-bath, and a two-car detached garage. It was on a corner lot with almost no backyard but a large side yard. The amount of work involved in the rehab process would probably discourage many from ever purchasing again. There was a hole in the roof that we laughingly called the skylight – with a nearby wall that was so rotted that the 2-by-4s crumpled in our hands. We gutted and rebuilt just about every room, redid most of the electric, replaced the roof and much of the drywall. Most of our children were there pitching in to help. Even the grandchildren had a few jobs. We did as much as we could and hired out what we felt needed professionals. I honestly don’t remember how long it took but it felt like forever (I think we got it done in 3-4 months). Our first tenant was there for one year. Not that we had any plans to sell but our second tenant expressed from the very beginning he wanted to buy it. The husband had grown up in the neighborhood and his family still lived there. Within a few years after they moved in, they approached us about buying it. We came to what I would call win-win terms and they bought it. They were overly excited and it felt good knowing that we helped a family find their forever home.

How do you fund your investments?

I wish I could say always creatively; those credit pulls really hurt when you’re an investor! That has not happened nearly enough, but we give it a shot whenever possible! We use a variety of strategies to fund our deals. We have used some of our rainy-day savings as well as home equity funds in the beginning. We have used owner financing, private funding, bank commercial financing, cash out financing of rehabbed and rented investment properties we already own in preparation for the next deal, and on one occasion, a hard money lender. Note that when it comes to risk, I always identify worst-case scenarios and come up with a plan to keep us afloat and from losing what we have accomplished. If you ask me what I would recommend to a new investor, it is perseverance and always ask if not your bank, then who do you know in the area that is lending. Very similar, if not now, what needs to change for you to consider me as a good candidate for a loan with your bank.

Do you have a real estate license?

Neither of us have a real estate license. What projects are you currently working on?

We are currently selling off a few of our single-family homes and, with the leverage of 1031 exchanges, investing in more vacation rentals. We are also getting bids to expand our self-storage facility to include RV and boat parking. At some point in the next year or two, we will be building vacation rentals on two vacant lots I bought in my self-directed IRA back in 2020.

How much time do you put into your real estate education?

We are members of two local REIAs and attend them as often as possible. I cannot say enough about how CCIA (Chicago Creative Investors Association) has helped us. Jane Garvey is so knowledgable and involved in legislation

Continued on Page 13