Real estate investing is the best way to build wealth but most first-time investors don’t know how to start. They have the money and are ready to use it, but how exactly do they start? Today’s guest is a data-driven, people-loving, Houston area real estate professional with the goal of educating people about real estate. Join Renee Williams and Camille Davis as they talk to real estate investor, Lexi Sims about her journey into real estate. Find out how she generates passive income by investing in crowdfunding. Discover the power of house hacking. And learn why her goal is to teach people about real estate investing. Start getting educated today!
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Real Estate Investing For Real Estate Agents With Lexi Sims
We have with us, Ms. Lexi Sims. She is going to tell us all about her, her career, and the great things that she is doing as a female entrepreneur. Welcome to the show, Lexi.
Thank you much for having me.
Thank you for joining us. I wanted to ask you a little bit about your real estate background and some of the things that you're doing now. I understand that you are the president of a very influential organization. Can you tell us a little bit about that?
I started in real estate. I got my license back in 2016. That was born out of wanting to invest and I was still working full-time. Fast forward to 2018, I started doing real estate full-time and fell in love with it then. Since then, my main goal has been to educate people on the home buying process and real estate in general because I feel like the majority of people that I come into contact with don't know what that process is. If you don't know what that process is like, how do you even take a step or think that you can accomplish this thing if you have no idea where to even start? That's how I got into it. What I try to do a lot of is educate other people.
In being in that real estate space, I got introduced to the Houston Black Real Estate Association. Through that, they have an affiliate group called the Women's Council. I'm the president of that group. We do a lot of community service, but we also try to empower women in the real estate field and the world to get as many resources as possible to connect with one another and share. Sometimes, it can be a bit much. It's in a high-stress situation and career. It's good to be able to connect with each other in that way.
Real estate is a very high-stress career. So it's good to have someone that you can connect and share with.
I am a member of HBREA as well. There are a lot of great things going on within that organization. If you are a woman of color in the Houston area and a realtor, please check out HBREA. It's a good organization. It's a great way to connect with people with other agents of similar backgrounds. Camille, I wanted to find out how did you and Lexi connect?
I go to CrossFit. The owner of my CrossFit introduced me to Lexi. He said, “I have got this great friend. She's a powerhouse real estate. She invests in real estate,” and he showed me her Instagram profile. She's at this home that's totally run down. She's taken this video. I said, “I need to get her to be part of our group.” I love diversity. I think we all need each other. Everybody brings amazing things to the table. What I want from my women's group is for people with all kinds of different backgrounds, resources and talents and for everybody to come together as a community. When I saw that, I was like, “I need to connect with her.” We've been busy. I would've done more. I wish I had more time. I would do more with you, but we still have a bright future in front of us.
Lexi, I know you have a degree in Engineering. How did you make the transition first financially? I know engineers make money. How did you drop that to become a realtor?
It started when I got my license in the first place because I felt like I didn't know enough about the investing world or real estate in general. That was something that I wanted to do. Something that was always missing in my job as an engineer was very much people interaction. It was very straight lace. I worked for a government contractor. It was very like gray, black and blue suits every day. It was not a whole lot of livelihood and color going on.
With my personality, it did not go very well. Getting into real estate allowed me to merge those two things together, specifically with investing, because it's all about the numbers. I'm able to use that background of engineering for the number side, but also be able to communicate with people, and allow that to be my people-person side and merge those two things together. It was a perfect marriage. I had no idea I would be in years ago, but here we are.
Camille has a background not just in engineering but that's also in technical. Being in nursing previously, does that lend to your relationships with people now, you think?
Definitely. I think you have to have a customer service level with that and being a nurse, there's this adrenaline side that I like. I liked feeling I was making a difference in people's lives. Real estate does all the same thing for me, except I enjoy it even more. Going to school, they didn't have real estate investing. I switched my major one million times and Nursing was the best fit. I love Nursing too, but this real estate investing is ideal.
That's interesting how in our lives, these steps or puzzle pieces get put together and you look back over your life and say, “Everything is tailored to this moment that I'm in now.” I truly believe that the things we learned in the past are never wasted, but they are stepping stones or puzzle pieces to put us where we're at now and that we're supposed to be where we are now.
I subscribe to that personally. Every failure, success, everything that I've been through, every time I changed a job or switched situations, even if it was painful, is serving me right now. I did an Instagram post about that. Lexi, what are you doing as an investor? How are you living the investor life?
One thing that I do that is a little bit unique is that I invest with a group in crowdfunding type of investment. We put money into that every year from a retirement account. Every year we get a 20% return on it, which is way better than an account, CD or whatever stock that, that you can find out there. They use that money to build, typically multifamilies in the Houston area. Also, in the middle of purchasing a duplex as well, and that one is a little bit newer.
A lot of what I do, too, is helping other investors kind of figure out what to do. An investor has always been a popular term, but over the past years, it has exploded. Everyone wants to be an investor. They have this money. They want to use it. They know their real estate is a great way to build wealth, but they're lost on, “What do I do next?” Being a resource to people who are looking to do that has been a big part of my investor life or career thus far is helping others who are looking to do is to understand what that process is like.
Can we unpack that? Let's start first with what you said about crowdfunding because I don't know how many of our readers are familiar with crowdfunding. How does crowdfund work?
For crowdfunding, you would take a sum of money. For example, the one that I participate in is called the Emancipation Fund. There's a minimum entry of $5,000. You submit those funds to the Emancipation Fund. They then take the funds and build properties with those funds. Once the funds sell at the end of the year, you receive a return on your investment from what you put into that. Some people want to be an investor, but they don't want to go find houses, talk to contractors or do any of the steps and the work that goes into it. Being able to get a return every year and you didn't do a thing. All you did was spend the money. It is great for a lot of people.
Investment gets work. It's a job. It can be passive, but they're going to be some work steps in the middle of that passive situation. That's how that crowdfunding works. Some people use them to flip as well. If you have a group of friends, then you guys may be $20,000 and $30,000. Let's put that together, flip a house and then we will split the proceeds between all the people who have contributed to it. It is another smaller example of how to crowdfund.
It sounds to me like crowdfunding is a little bit different from syndication. In syndications, which is what I've been doing, we know what the property is. The property has already been identified. We get a private placement memorandum that tells us specifics about this particular apartment complex, “It's this many units. We're going to reposition it this way. These are all the things we're going to do.”
As a passive investor, I may put a $50,000. Those have a very high bar. The barrier to entry is pretty high. I've done as much as $50,000 and sometimes $100,000 for these different deals to get in. They are specific properties. For crowdfunding, is it a fund that is purchasing various properties and you may not know what property? You trust that it's going to fit a certain kind of recipe and that you're going to get a return, although no return is ever guaranteed, but you don't necessarily have a specific property that you are in.
I've seen it be done in different ways. For the one that I participate in, there is no particular property. There are multiple properties that are being bought, built, sold and flipped. That's why we get the return at the end of the year as opposed to once a particular project is complete.
It's a low barrier to entry, so it's something that people can deal with if they have $5,000 and you want to do that. We are not necessarily recommending the Emancipation Fund. Ladies, please do your own due diligence and find out what investment strategy works best for you. Lexi is having some success with this one, but that is no guarantee of your future success.
Please do your own homework and know that all investments are risky. You do stand a chance of losing everything that you put into it. Whether it's $5,000 or, in my case, $50,000, you can lose the whole thing if you end up with a divorce because your husband is mad because you invested that. You invested this money. I always have to give our disclaimers and Cami is always, “You're always accurate with all of that,” but we have to say that.
People want to think that real estate's easy and that the sky is always. There's a lot of work involved. It's not always roses. You got to be ready for that. I enjoy the roller coaster ride at times because I like solving problems. It's not always perfect.
There are many different ways to invest. With crowdfunding, you're a passive investor. You have no control over any of the investments or what you invest, but you have the benefit of putting in money, doing no work, and hopefully getting a return. What Cami does is very different. She's putting in all of the work. She's showing up constantly the time and doing all the hard work. The return is obviously going to be higher or better, but it depends on what you want in your life. The people that you work with, in general, are they full-time investors? If I want you to work with me, do I have to be a full-time investor if I want to find a property for you to help me?
Not at all. A majority of the people who I help are not necessarily the first time, but the first couple of times investing. You do not have to be an experienced investor to work with me. Education is important. Being able to be that resource to people is super valuable. You can be brand new. Know that you want to do it and then we'll figure out the rest. I'm in New Caney, but in the Central Houston area, especially for investing, is where I tend to hang my hat.
Let's talk about this grand thing that we are, which is entrepreneurs. As an entrepreneur, how does that affect your personal or family life? Do you have to try to balance things? How does that work for you with your personal life?
It is most definitely a roller coaster and it is something that I have to be very intentional about. I can become very laser-focused on things. I have to remember like, “You have a husband. You have to talk to him too. You have to balance work, play, family and everything else in one.” It is a daily struggle and thing that I have to do intentionally because if not, I get burned out easily every day. Sometimes at the end of the day, I'm like, “A lot happened today. There are many things that happened today that I had no control over,” but we made it. You get up the next day and you're ready for whatever to come at you. Thankfully I am very rooted in faith. I don't know how people do it without it. I would probably lose my mind if not for that grounding to keep me afloat.
Entrepreneurship is all about balance. You need to balance work, play, and family all in one.
It sounds like you have a lot of irons in the fire. You are a wife, a realtor who represents clients, a real estate investor and President of the Women's Council for HBREA and you are a CrossFit self-care guru.
I don't go to CrossFit. I keep saying I'm coming. It's a little for us to come out and be consistent. I'm not the CrossFit lady.
I did find her through my CrossFit owner. She does exercise because when I called her the first time, she was out on a track running.
I try to run at least a few times a week. The first time we did talk, I remember I was out there running. It has to be early in the morning. If it's after 7:00, it is not happening.
As far as passive income is concerned, are you building a team for your real estate business or is your passive income sort of coming from real estate investing at this point?
It’s a little bit of both. It has never been my goal to be an agent who has a whole lot of clients. I want good clients. I also don't want to be a 60-year-old still going out and showing houses. I can't imagine that for myself. We are not even going to allow that to happen. Part of my plan is to build more of a team where I don't have to be as hands-on and where I can open up the door to do more investing. I also have a short-term rental. I have an Airbnb as well. We have one unit and hopefully, we'll get a few more as time progresses. I'm able to do this as something that I have to very much work on, but delegating and not doing everything myself. As I'm able to get better at that, I want to do some other things. There are many things out here to try and do. Why not them out?
The center of personal and professional growth is to be able to have other people do things so that it frees you up to do things that are either in your zone of genius or things that you love doing. If you're 60 years old and you still want to open doors because that's your passion, then please do that by all means. There's nothing wrong with them. If your goal is to have a passive income, you don't necessarily have to go and open those doors or show properties. That is a great goal to have, but you have to be willing to start building towards that by putting some things in place in your business, like short-term rental and also by being a passive investor in some deals, which it sounds like you're doing with your crowdfunding. Do you have another agent who's helping you at this time or an assistant or anything on your real estate team?
A transaction coordinator. That helps a lot. I'm not doing a whole lot of paperwork and can at least pass that on to where I can be more engaged in the bigger picture of things.
Camille, you and I talked about that with Kyle when he first started. Cami's husband is a realtor as well. At that time, Kyle wanted to get some help, but he wasn't sure where he could use help in the process. A transaction coordinator is a great way to start because that's the heavy part of the paperwork after you get a contract. They can take the contract all the way to close and show up at the closing.
A transaction coordinator is a great launching pad if you're a real estate agent and you're looking for somebody to help you with the admin and the paperwork side. It is a great way to go. You are smart, Lexi. Way to go with it. Is there anything particularly exciting or any deals you're working on? I heard you mention a duplex or something you got going.
My husband and I are purchasing our first multifamily. We're purchasing a duplex. One thing that I would do differently in life is that I did not purchase a home before I quit my 9:00 to 5:00. If I had known better then, I would've done it differently. We had to go through the whole, “You're an entrepreneur. That's a little bit different when it comes to the loan process.” We're purchasing our first multifamily and intend to house hack that. Live on one side and then rent out the other side. I'm excited about that.
Unpack all of that. Tell us why it's important to have a W-2 job. What happens with the financing when you don't have that W-2?
The IRS wants their money. If you're self-employed, a lot of the times, on people's taxes, what they show as income, they have done a lot of deductions right off to be able to not have to pay necessarily as much in taxes or to be accurate about what they're they're doing. When it comes time to purchase a home, you need to show as much income as possible or at least enough to qualify for the type of home that you want to get versus with the W-2 where the taxes are coming out, every check that you get with a career like real estate, there are no taxes coming out. You essentially need to make sure that in the eyes of the IRS, you are in good standing and have paid taxes on the funds that you have accumulated over at least the past two years.
There are no taxes coming out of your career in real estate. So you need to make sure that in the eyes of the IRS, you are in good standing.
It's almost like a Catch-22 because when you own a business, you want to pay as little taxes as possible. You try to write off everything like, “I made no money because I don’t want to pay any taxes.” You are ready to buy a house and you are like, “I made no money.”
The lady you are with, “You have no money.” They do have entrepreneur loans, but those also tend to come at a higher down payment and interest rate. It's like either you pay for it with the purchase of the home or you pay for the IRS. You're going to pay either way.
As far as house hacking, can you give us a definition for those who are not familiar with house hacking?
House hacking is where you buy multifamily, usually between 2 and 4 units. You purchase that particular property and then you will occupy one of the units. The benefit to doing that is that a lot of the lower down payment programs for purchasing the home require owner occupancy. Since you will be an owner-occupant, you can now benefit from doing something like an FHA loan at 3.5% down, 3% or 5% conventional, as opposed to if it is not going to be an owner-occupied situation, you're looking at 20% down. It's a huge advantage to you to be able to get in, occupy and have your tenants and your other units contributing to your mortgage. Depending on your market, they may cover the entire mortgage. How many units you have, or at least at the very least, a chunk of it should be paid by the tenants that you have.
We had another person who was talking about house hacking. She had an additional dwelling unit on her property.
That was Vivian. She brought up Rich Dad Poor Dad and how if you’re not making money for yourself, then it's a liability. It needs to be income-producing, even if you're living in it. That's the goal.
Robert Kiyosaki in Rich Dad Poor Dad talks about, “Is your home eating you or feeding you?” If your home is eating you, that means you are paying a mortgage every month, whether you have a job or not, sick or not, you're responsible on that primary residence for paying the mortgage every month for 30 or 15 years, or however long your mortgage is. If your home is feeding you, then you are doing what's called house hacking.
You're either renting out rooms in your home as property where people can rent a room or you have an additional dwelling unit like a garage apartment above the garage, you converted the garage into an apartment, or you have a 2 to 4-family dwelling. That's like a duplex, triplex, or fourplex. There are many ways the house hack to get that primary residence feeding you. Those are a couple of the ideas on how to do that, but it is smart, Lexi.
Thank you. I'm excited about that. I've helped a lot of other people do it. Now I'm glad to be the one, to be able to benefit from it.
What's next for you? What do you have coming up on the horizon that you are thinking about doing as far as your real estate investing career?
I want to get more into doing flips on my own. I was saying that I do them primarily like with my clients or for my clients, but I very much want to do it for myself and my own investment portfolio. I'm excited to get into that. I've been talking to a couple of lenders about what that would look like and wanting to leverage a lot of other people's funds as opposed to my own funds to be able to do that. That is taking me on that path of door-to-door everyday real estate transactions as far as Asian and clients stepping away from that more and getting into more of passive or investment type of career style.
I know somebody who does subject to.
Me too.
She can teach you how to find those properties and get them for very little money.
It is harder than it used to be, but I got two. I got one in Maybe 2022 and also June 2022.
People will say that subject to no longer works. I'm glad that you're still getting projects subject to. Just because something is harder to find does not mean that it does not exist. You have to be willing to do the work.
There are always less situations. There are always problems that come up, even in an upmarket. There are situations where you're going in and solving a problem. It still works.
What are the last two that you mentioned? What was the situation for those homeowners?
One was a divorce situation and the wife got the home in the divorce, and then the wife passed away. The husband was still on the loan. The husband came to me even though he didn't even own the property anymore because she got the home in the divorce and she passed away. He was still on the line. His credit was still for that loan. What I was able to do was go in and still get access to the loan through him, then the son, who was twenty, was now the owner of that home. The son signed it over to me, but I still had access to the loan. It still works like that.
You had one other one. What was that one?
The other one was she didn't live in the home anymore, but it was her primary home when she first got it. She got married and moved into the home with her husband and the other home. She rented out the home that her name was on the mortgage fund and then COVID happened. Her husband died, but she inherited the home that he was in. Even with that, the husband made all the income. Even though she had assets, she had no income so she was not able to pay the mortgage on the home that she was living in.
I was able to come in, take over that loan, get it rented, and I paid her. She had a lot of equity in that property. She could have turned and sold it, but she did have a family member living in there. I let the family member stay and I came in and gave her $30,000. She had $100,000 something in equity. She needed a quick fix and she was behind. She was happy to keep her family member in there and move on. It still happens. There are still situations.
As long as life happens, subject to can happen.
How do people find you, Camille?
I am on Instagram and Facebook @CamilleAndrusDavis. We are creating KC Living. It's for Kyle and Camille. We are getting a new Instagram handle and website. That will be our all-in-one because we have constructed and remodeled your kitchen sides. If you have your home, we can come in and design it. Also, we can do remodels for investors, and then we get the realtor side. We have all these different aspects or you can invest with us also. That's why we created this KC Living. That's going to be our new thing.
For people who were in trouble, how did they find you?
I find them most of the time. One of them was a Facebook marketing thing that I did and she found me on Facebook. The other one, the husband, is renting a home from me because the wife that got the home and the divorce was behind on the loan all the time. His credit was shot because he's on a loan. Before she passed away, she was never paid her bills, never on time, doing loan modifications, and then getting behind. He, as the renter, then contacted me and said, “My wife passed away. This loan is in my name. Can you help me?”
The reason why I was asking is because I know that there are all kinds of ways as Lexi starts to build her business of trying to find clients. Lexi, you are a realtor. I know that you probably come across properties from time to time that is either sellers in distress or they have these weird situations. What I was trying to do with that question is to encourage people, if you work in the real estate industry as anything, a realtor, already as an investor, an inspector or an appraiser, to keep your ears open for people with problems because when you hear the problem, you can be the solution if your head is thinking that way. You have to be thinking that way, though.
If not, you could have a deal right in front of you and not even recognize the potential for them, for you and for everyone to get what they need out of the situation if you aren't kind of thinking that way.
That's exactly where I was going with that. Lexi Sims, can you tell us how to connect with you or how to contact you? If I'm an investor in the Houston area and I want to tap into your expertise, or I'm a realtor and I want to connect with you, how do we connect with you?
As a millennial, the best way to connect with me is going to be on social media. I am on it way too much, but that also means that I'm responsive to it. On Instagram, it's @ListWithLexi. On Facebook, it is @AlexiaSims. It is my business age.
Thank you much for sharing your time with us. All of the wonderful things that you are doing are impressive. We want to make sure that you are successful. Be sure to stay connected with me and Camille as you move forward with your career. Keep running.
Thank you. Maybe I'll try CrossFit again one day.
It's not for everybody.
Thank you guys much for having me. I enjoyed it.
Thanks, Lexi. We will see you all next time on the show. Thanks. Bye.
Important Links
Ms. Lexi Sims – Instagram
Instagram – Renee Williams
Vivian Yip – Past Episode
Instagram – Camille Davis
@CamilleAndrusDavis – Facebook
@AlexiaSims – Facebook
About Lexi Sims
Alexia 'Lexi Sims is a data-driven, people-loving, Houston area Real Estate professional.
She was fortunate enough to attend the University of Oklahoma (Boomer Sooner!) and obtain a degree in Industrial Engineering. Fast forward 7 years, needing a way to combine a love for numbers and data with a love for helping and interacting with people on a personal level, a full-time real estate career was born!
Assisting families and investors in achieving their real estate goals has been a dream come true. Alexia prides herself in being a true resource to her clients and always goes the extra mile.
Alexia is also a self-proclaimed servant leader and serves as the current President of The Women's Council of the Houston Black Real Estate Association and is a board member of the 5th Ward Chamber of Commerce. When she is not working, she enjoys spending time with her husband, family and friends.
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