Thea
This is a story about someone who grew up drinking powdered milk and lived on the free school lunch program until years later perseverance—and the wide world of real estate—propelled her to attain independent wealth.
Welcome to the first interview on Theatrum. I was honored to be able to interview a friend and a mentor for this one—someone who taught me great lessons of perseverance and hard work.
Meet Stephanie Nesselhuf, 50, current house flipper, realtor and owner of Shifting Spaces, LLC. What follows is her story of strength, risks, burnout and smart financial decisions because let’s face it, “Money is something you’ve got to make in case you don’t die” (Max Asnas).
House flipping refers to the practice of buying a distressed property to renovate quickly and resell it for a profit (Stephanie asked I place particular emphasis on the words distressed and quickly). The goal of any flipper is to sell the property at a higher price than the total investment, including purchase price and renovation costs, to capitalize on the appreciation of property value.
A few years ago, my brother and I had the honor to work with Stephanie on a distressed property, and under her guidance, the results were amazing (see the gallery at the top of the page for the evidence).
The Beginning: Learning Real Estate
Stephanie did not have much growing up. “I tell you this not for sympathy, but for background information because I think some people see me now and assume that I came from a family that had financial means and really it was just perseverance and a lot of hard, hard work.” She was the oldest of five, and access to food wasn’t something to be taken for granted. Something she did grow up with was parents who always fixed up their homes.
“I always had a passion for projects,” Stephanie said. “I grew up doing our own house projects, and because of our simple means, my parents didn’t have a lot, so we had to do it on our own.” This fact foreshadowed and perhaps deeply influenced her direction later in life.
I’m emphasizing “later in life” because she was a school psychologist in her early 30s when she started getting into real estate. “I had a lot of time in the summer, and at Christmas time, and I started buying rentals.”
How did she finance her rentals?
At 25, Stephanie had purchased her first house for $3,000 down. This house, holding deep emotional value to this day, financed many of her first properties. “I was able to refinance this house many, many times. I refinanced it probably four times over 20 years to purchase other homes, and I kept it as a rental.”
Break into House Flipping
At this point, Stephanie hadn’t broken into the world of house flipping, and she’d reached a point of stagnation: she could not get financed for any more properties.
What did she do? It was a Hail-Mary move, but she called up an old friend.
“I remembered a guy in Sioux Falls mentioning to me a few years earlier that one day if I ever wanted to have a business partner to give him a call,” She recounted. “I was like, yeah, sure. I thought it was bullshit. But when I was told that my debt-to-income ratio was too high, I called him up and reminded him of our conversation.
“We came up with the agreement that we would start an LLC, each put 10% down on these three foreclosure properties (they were 60k each), and he would put in the money for the materials and I would do the design and labor. Well, I didn’t have 18k for the 10%, so the next day I received a 0% credit card check in the mail. I thought to myself, ‘This is either the dumbest thing I am about to do or the most brilliant,’ and I wrote [the credit card] out for $20,000. I knew that I had a year to pay it off.”
It turned out to be the most brilliant.
“After one year, we sold two of the properties. I paid off my 20k in cc debt, made 20k in profit, and kept the third property for years as a rental unit. I am forever indebted to that man and his faith in me.”
Lessons Learned from House Flipping
From there, Stephanie continued to flip houses. She saved money by doing as much of the labor herself as possible. This required her to become a jack-of-all-trades, learning processes in demolition, construction, design and real estate. She gained practical knowledge in a plethora of skills: woodworking, carpentry, masonry, drywalling, plumbing, electrical maintenance, landscaping, painting, general contracting, etc. These skills often go unconsidered but are vitally important to the success of a renovation.
She shared two key lessons learned from the full-fledged break into house flipping:
- “You will never know how the story could end if you do not take the risk by asking the question. If I had never reminded him of our conversation years earlier, and I didn’t make that leap of faith with that phone call, my life would be totally different.”
- “People think you need to have piles of cash to start flipping homes or a business. Sometimes, you just need a crazy idea and the gods sending you a blank check in the mail.”
I think it is of vital importance to emphasize the following: Stephanie has been working since about 12 years old, but it wasn’t until she was 41 that she started successfully flipping houses and creating independent wealth.
Since her first flip, she has made up to $60,000 on a flipped property after excise and self-employment taxes. At her peak volume of projects, she worked on seven houses at one time. A lot? Yes. Too much? Probably. But she was addicted to the work, and she loved it.
*Note: Another time, she only made $10k on a project, and another time, she finished a project in the red. Stephanie stressed that “it is a total gamble and a risk that you take every time.”
“It is a total gamble and a risk that you take every time.”
However, those among us with such an addiction live with a unique kind of curse.
Burnout
Even with the influx of cash coming in with Stephanie reaping the well-deserved rewards, the backbreaking hours and damage to her health and personal relationships forced her to rethink the means to her success.
“Working seven days a week and sixteen-hour days was not good for me, so something needed to change,” Stephanie said. “As much as I loved the work, it didn’t do me any good if I was dead from a stroke or a heart attack.”
She was on the brink of losing her marriage. Her blood pressure rose to concerning heights and she became pre-diabetic. She was addicted to the work, but the work was killing her.
“I love real estate so much,” she said. “I wanted to stay involved in it somehow, but I needed a breather.”
She spent nine months finishing up the flipping process on her current properties and then decided to stop.
A New Beginning
But, of course, she didn’t completely stop.
She took a nine-month break from house flipping, addressed her health and well-being, and became a successful realtor with REMAX Advantage. Instead of realtors coming to her with potential flipper properties, she is now the realtor in question.
After the short hiatus, she has slowly taken on two new projects. She stressed that now she only does one flipper at a time and hires out most of the renovation work. “I’m slowing down, but I’m not stopping.”
As an individual who struggles to be lazy or even take rest days (an unfathomable trait these days), this concept of slowing down has not been easy for her. “I’m trying to take care of myself and my family and my health because there’s no point in doing all this if I don’t take care of myself and I’m dead. There’s no point.”
You can find Stephanie today hanging out with her puppers, two French Bulldogs and a mini Golden Doodle, and her partner, Dona. You will almost always find her working. Unless she is in Cabo. Then she is suntanning and practicing this strange thing called resting.
Bonus Q+A
Key Takeaways
Thank you for reading the first interview installment on Theatrum. If you have questions for Stephanie, would like to know more about her house-flipping process and tips, or want to share your own story, send me a message here or leave a comment!
