House Hacking Part 5: Side-by-Side Tiny Home Success Stories! How They Unlocked Creative Property Potential to Generate Income, Featuring Factora Founder Allegra Moet Brantly
CREDITS
Hosted by: Kristina Modares and Steph Douglass
Produced and Edited by: Megan Pue
Music by: Lemonmusicstudio
Photo by: Chelsea Francis
SEASON 6, EPISODE 11 SUMMARY
Welcome to another special guest episode featuring Allegra Moet Brantly (stage name 😉), who is on a mission to lead 1 million women to $1 million in net worth through her company, Factora.
Alongside our host Steph, they share their personal journeys with tiny homes - including the challenges of getting permits, the courage needed for big property projects, and how overcoming obstacles led to growth.
They also discuss the pros and cons of renting out tiny homes, from earning additional income to the complexities of property management. Tune in for a wealth of insights on leveraging tiny homes to boost your financial journey.
Get in Touch
Comments, suggestions or feedback? Email us at podcast@openhouseaustin.co
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Please stay tuned for more episodes every other Tuesday, and subscribe so you don’t miss them! You can find us on Spotify, Stitcher and Apple Podcasts.
Related Resources
Learn more about Factora ❤️
Blog post: "Build a Tiny House: Permits & Process Resource List For Austin, TX"
Blog post: "This $89K Pre-Built Tiny Home Covers My Entire Mortgage"
Blog post: "How to Build a Tiny House: From Costs to Construction"
Podcast episode: "Building a Tiny House in Los Angeles! Featuring Eric Mann, Creative Behind LeverCraft Coffee & Ultra Grinder"
Connect with a Realtor - Austin-area experts with experience house hacking, buying with friends, tiny home construction, and renovations
Join our Creative Home-Buying and Wealth-Building For Women Group - it's free, and we meet up regularly; you're welcome to pitch yourself to other members via the Facebook Group or at an in-person meetup
Sign up for our next "How to Buy a House in Austin" Workshop
Transcript (Auto-Generated)
Steph (00:02.713)
Welcome to the Open House Podcast for Women Talk Real Estate. I'm Steph Douglas and I am here with the famous Allegra Grosick, new last name, which I think that was the first time I said it on live. Yeah, I know. That's so wild. Well, regardless, when I met Allegra, she was recently in a relationship and she did not have a business yet, as did I not.
Allegra Grosek (00:17.11)
No one's gonna know who I am. I'm not famous anymore.
Steph (00:34.334)
And now we're in such different places in our lives. And so it's always such a joy to do podcasts with you.
Allegra Grosek (00:42.03)
I mean, it is, and I realize today that you're mostly on my podcast.
Steph (00:48.361)
I know this might be that first, I think you've been on one before now.
Allegra Grosek (00:52.638)
I think so. But yeah, for those of you, I'm not famous. That was very sweet intro. But for those of you who do know of me, you probably know of me as Allegra Moette Brantley, which is still my LinkedIn stage name. I don't know why I put Grossick coming into this, but I'm still known professionally as Allegra Moette Brantley.
Steph (01:22.868)
Did I go out? I blinked out. Did it go black? Oh my God. Okay. Oh, I don't want. No, no, I think we're good. It's uploading. We're good. We can piece it together. We have an expert editor. Okay. Well, yes. So you said we were saying, you don't know why you're Allegrogrostic. Regardless, Allegra, Moette Brantley has her stage name. She is the...
Allegra Grosek (01:25.484)
Bye bye.
Allegra Grosek (01:28.842)
It's gone. It was gone. She wants whatever.
Steph (01:51.768)
founder of Factor Wealth and your mission is to lead 1 million women to a million dollars in net worth.
Allegra Grosek (01:59.818)
And that is correct.
Steph (02:01.897)
I just love it. It's very inspiring and I am one of those women.
Allegra Grosek (02:07.73)
you are. And part of growing wealth includes the asset class of real estate, which so many people, well, my people are women. So so many women get really excited about because I've always said it like, you know, stock market investing, while I do think it is incredible and so beyond valid, it's crucial to wealth building.
It is not as fun or heartfelt as real estate. You don't live inside of it. It's just a bunch of fucking, can I cuss over the podcast? Okay. It's just a bunch of fucking numbers in lines on a platform or maybe multi-platforms that you use. And there's no like emotional impact or significance. Whereas where you live or where you,
Steph (02:45.14)
Yes, rated R.
Allegra Grosek (03:05.186)
have other people live that you own is, it's a hard asset. It's got so much more to it. And so I know women who come through Factorra's Well Circle, which is our investing course, love the real estate section. And then obviously we've got you weaved throughout that portion because you're our resident real estate lady. So we've had a really fun time building our businesses and our focuses, mine being on like,
overall wealth building and yours being so niched in to how to build wealth through creative real estate acquisition. Yeah, I'm on a tangent, but it's been a blast.
Steph (03:43.928)
Yeah. Yes, I agree. I just felt, I just got an overwhelming feeling of the luck that we've had to like come up together in these businesses that are so complimentary. And we have so many overlapping clients and the community members. And it's amazing. And I think what you're saying is like captured in our mission statement, which is real estate done right, inspires community creativity and income.
which is something that like women sometimes struggle as you've worked with women with their mindset around money. It's not okay in a lot of circles to want income and to want more money and that is something that real estate and in general wealth building we've been trying to expel. Like it's okay to want income from things.
Allegra Grosek (04:37.098)
And man, is it fun when you get the income because it's not like you get this money and just go out and buy things. You get the bug for buying more assets that bring you more money. And so I think a lot of women that go through Factors Wall Circle start out feeling a little ashamed or worried that they might be perceived as greedy if they were to do all this investing.
Steph (04:40.013)
Yeah.
Allegra Grosek (05:04.35)
and then they completely wipe that off of their mind when they're doing it because it's really empowering to understand how to build wealth. And by the way, that's what you're doing when you go to work anyways. You're working really hard at a job for money. So why would you want to limit it there? Like if you're good at your job, why can't you also be good at investing so you don't always have to work so hard at your job? Because like we know,
there was just a world pandemic. A lot of people felt insecurity, both in their work life, in their home life, in, you know, they could get married in front of people ever again. Like we had some weird shit going on. And I think that having full investment accounts and owning assets can make you feel really calm when it's cloudy outside.
Steph (05:43.992)
Yes.
Steph (05:48.611)
Yes.
Steph (05:58.936)
Oh my God, that's it's preach, seriously. And just like the lives that we've built today, we are going to talk about one specific thing that me and Allegra did together, which was build these tiny homes. But we've also built these lives where we feel really secure and we feel really free. Yesterday was a Monday we met up when we walked the lake. We have standing dates every Monday to go do yoga, which we need to do more. But sometimes we're late and we go to the lake.
But it's just like every time, I've never taken it for granted and I know you haven't either, the freedom that we've built through knowing how to invest in ourselves and in real estate and in stock market. So it's just so empowering to have these skills and it's also extremely lucky that we get to teach women how to do this.
Allegra Grosek (06:48.65)
I agree. And I appreciate that you brought up our Monday flexibility because the thing I always tell people is while financial freedom is a super sexy term, well before financial freedom comes financial flexibility. And if you are able to have enough assets and income producing assets at that, then you can have a lot more ability to do what you please now.
Steph (07:02.702)
Yes.
Allegra Grosek (07:16.158)
So yeah, on Mondays we take two hours out of our day to do whatever the heck we want and that feels great.
Steph (07:22.116)
Amazing. Yeah, it's just, we're just seeing our, all of our hard work pay off in this way and like having each other as mindset accountability partners in that we're not just striving for more and more for no reason. We're really doing this. We're investing in real estate. We're investing in general so that we can have this. It really, it puts everything into perspective. So we encourage you to have an accountability partner and to find community. We both have incredible communities that you can join. You can join both of them.
So, Factoroworth.com, is that right? Yeah, I know. We're not just selling stuff up here. I feel so like every time I talk to you, I'm like, this is important.
Allegra Grosek (07:52.782)
That's right.
Allegra Grosek (08:03.086)
I'm telling you, like I have a daughter who goes to play school and can get picked up by me every day before 3pm because I have a totally flexible schedule. And I know you are a, I don't know what you call it, pickleball professional, amateur professional, I don't know sports terms, Vanya, you know that.
Steph (08:20.949)
amateur, amateur.
Allegra Grosek (08:24.246)
But anyways, we just have so much flexibility built into our daily lives that I couldn't have even imagined when I was working back in corporate startup, just got to work before it was light outside, left when it was dark outside New York years. And so to have
So much flexibility right now, only a few years into investing, is why I'm so obsessed with all women learning how to do it. And so yeah, if you wanna learn how to do it generally, Factorra's got you. And then if you wanna get into real estate, which I always tell people is not only such a great asset class that women already are like keen on and love, it's also really good for younger women and older women alike because
Younger women may not have as much money to get into the stock market, and older women don't have as much time to net out volatility in the stock market. So you can get way more creative with this asset class than you can with that one.
Steph (09:23.833)
Yes.
Steph (09:27.756)
Absolutely. And specifically with what we're talking about today, which is house hacking in a certain form of house hacking for people of all ages, but specifically if you want more privacy, um, which is the tiny home or the accessory dwelling unit, um, ADU you've heard it called lots of different things. Um, Allegra and I over the pandemic were living in houses, probably two blocks away from each other. Um, it was a dream. We would meet up and go for walks and
We decided to build tiny homes in our backyards at the same time and really try to maximize the space that we already had. So we already had bought these houses, we had them, we had the space and we're ready to go. What was your mindset going into this? Because I know you bought that house and it wasn't necessarily in the plan.
Allegra Grosek (10:17.386)
Yes, okay, so first off, Steph was my real estate agent to buy that house. That was the first house I bought with you? Okay, three houses later. Okay, so I bought that house and was really excited to do some more house hacking. I already had a house before that we had house hacked, but I was ready for like a bigger yard, more of a homey block.
Steph (10:25.444)
Mm-hmm, I think so.
Yeah.
Allegra Grosek (10:47.118)
you know, being able to walk to some local places because at the time I didn't drive, but I digress. So I had planned to take a front window of, it was just a two bedroom, one bathroom bungalow. And I was going to make that front window into a door and literally just have an Airbnb studio unit build a bathroom and that would be it.
And then when I got into that house, I just felt very closed off to that, even though I had just been doing it in another house. And so I was all in on house hacking and loved how it reduced my mortgage costs or supplemented my expenses. I literally just moved into that house and was like, I don't wanna do this plan. Shit, shit, shit. Like I just bought this house with this plan in mind and now I'm backing out on the plan. But.
Steph (11:35.896)
you.
Steph (11:39.917)
Yeah.
Allegra Grosek (11:44.694)
This is when you were talking a lot about tiny houses and how they're a great option. Did you have a tiny house built yet?
Steph (11:53.272)
We had pulled a tiny house onto a property, like a tiny home on wheels, and I was like, dang, this is so good.
Allegra Grosek (11:59.286)
Right, okay, so you were kind of talking about it and then anyways, we got going and we're like, what if we both built tiny houses in our backyards and used all the same contractors so we could negotiate two for onesies, two for one specials? And I love negotiating and getting some deals and we just happened to really capitalize on this at the right time. I say the right time for two reasons. No one could have known.
Steph (12:12.601)
Yeah.
Allegra Grosek (12:29.378)
that the world was gonna shut down. But also, you know, the costs that we're gonna share of building tiny homes are so much more expensive now. Like they weren't as popular as they now are. And so this is where I'm always talking to Eman about time in the market is more important than trying to time the market. Because if I had waited to fully understand everything and be perfectly ready,
I wouldn't have been able to have such a quality income stream off of this project that, I mean, we got those tiny homes up in about three months, right?
Steph (13:08.94)
So fast, it was so fast. And part of the reason the costs were so low too, is that we did some of it ourselves and we pieced it together. We didn't hire one person as the general contractor, we kind of did that ourselves. And so it is cool to know that you can be scrappy and you can really lower costs, but still, even if we tried to do the exact same project today, just with the rise in building materials, in labor costs, it would be more.
And...
Allegra Grosek (13:39.406)
I also want to say this, while I had never done anything like this, like I had not even done a reno project. Like in my first house, we changed nothing. I can't wait to go back to that house and do all sorts of stuff because I'm very comfortable with reno projects now. But at the time, I really felt my boost in confidence because I was partnering with you, someone who was already known for real estate and doing stuff like this.
Steph (13:47.737)
Yeah.
Allegra Grosek (14:06.262)
But I later came to find out like, you're just one of the most risk forward people I know and you're willing to do anything brand new, probably not just in real estate, like whatever it is, with zero fear. And so because you went at it in that way, I was like, yeah, all right, let's do it. We don't need a GC. Why would I need a GC to build a house in my backyard? What even is a GC? Which is general contractor for those listening, but I've never hired one, so.
Steph (14:10.04)
Ha ha ha!
Steph (14:16.844)
Yeah.
Steph (14:26.092)
No.
Steph (14:33.668)
Yes. Yeah. And this was my very first project building anything from the ground up, really building anything. I'd renovated before, but that is very, it's a very different game, a very different animal. So yeah, so we wanted to, not to capitalize, but like optimize, optimize our space. We knew that like you're, you actually the queen of pivoting. Like you are so good at having an idea.
Allegra Grosek (14:35.982)
I don't know.
Steph (15:02.968)
going forward with it and then shifting gears quickly. And that's a huge skill, decisiveness.
Allegra Grosek (15:09.518)
Thank you, I really received that. That is a lovely compliment, I appreciate it.
Steph (15:14.076)
Yes, because you had this in your mind, you acted and then you were like, okay, I don't want to do this anymore. And it wasn't the end of the world. You decided to shift gears. So we ended up doing this tiny home project because we had these homes. You were living in yours. I was living in mine temporarily while I was renovating something else. But I was like, I have this space. This is not...
a place that I could potentially earn income. And we had kind of spec'd out the income that was possible. And it was like, this seems like a no-brainer. We can pay ourselves back in a year or so, and then the rest of it is pure income. So it felt worth it. We were going at it together. We definitely, we didn't hire an architect. I sketched out the... This is silly.
Allegra Grosek (16:10.686)
It's amazing. I remember Fania brought me the drawing of like, okay, here's the rectangle and everything that will go inside it. And I'm like, it looks great. Like, I don't even think it was on graph paper. It was just in her notebook. And I was like, Yep, that's it. Let's do it.
Steph (16:13.38)
I'm sorry.
Steph (16:19.102)
Thank you.
No.
Steph (16:25.588)
So the trust. Yes. And I brought this to the contractor. We again, piece it together when you're doing a tiny home. So let's back up a little tiny bit and go to our outline so that I don't get wild. We decided that hiring out most of it and then doing some of it ourselves was like the way to go. I think we did you do.
Did you do the same amount of stuff yourself as we did or did? No. Yeah.
Allegra Grosek (16:54.698)
No, not even close. I'm happy to talk about that. We, okay. Well, first of all, just to talk about the structure in general, we decided that we were going to pour and put it on peer-in-beam. So we wanted this to be a real structure. As Steph mentioned, she had a wheeled-on situation that she was familiar with. We actually didn't even have a way to wheel it on because this was in the back of our house and it was quite narrow.
to have done that. So we were like, all right, if we're gonna construct it anyways, we might as well put on a solid foundation and like do this thing right. Because we found someone who could build the frame that was technically a guy building sheds for motorcycles. And so that is what he was doing for others. And we were like, yeah, but could you build us a shed for living in? And he was like, I mean, I guess, yeah, sure. And so that's...
Steph (17:50.988)
Yeah.
Allegra Grosek (17:53.514)
you know, what he did. But then we had all these other pieces we needed. We had a list of like, you know, you gotta order toilets, sinks. We've got little ovens. We did these cute kitchenettes. We got the same fridges. Like we literally were just like, okay, what's everything we need? Now go out and buy yours. And we got most of the same stuff. I mean, I think we picked out different flooring colors and paint and all of that. But in terms of who DIY'd the most,
It was you guys, because I remember you guys were like, yeah, we're painting today. And I remember coming over and they were covered in paint because you got the, what are the sprayers called? Okay. They rented paint sprayers from Home Depot and literally I could see paint in their ears and I was like, no, add it to the budget. I'm not doing that.
Steph (18:35.548)
Yeah, paint sprayer. Yeah.
Steph (18:45.098)
No.
Steph (18:49.6)
I will never paint again.
Allegra Grosek (18:52.094)
I can't believe you ever painted to begin with. I mean, it looked honestly terrible. You had all the masks on, but it was still covered in speckles and all your clothes. Anyways, and then I also remember coming over and you guys were doing the floors. And I was like, okay, that doesn't look so bad. I can do that. Like you just kind of hook and groove and like you have a cute little hammer. I mean, I remember Jake and I trying to do our floors.
Steph (18:54.35)
Hahaha!
Steph (18:59.889)
Oh. Terrible. Yeah.
Allegra Grosek (19:19.522)
We had to do them really quickly because something was getting installed the next, like within the next 48 hours and we didn't know how long it would take us. I remember it getting dark and we had no electricity in the shed yet and we had headlamps on. Of course, Jake has headlamps. And we were like still laying floors and it took so long and it was so hard and we'd never done it before. You'd already had floor laying experience. And...
Steph (19:23.114)
Yeah.
Steph (19:34.264)
Yes.
Yeah.
Steph (19:45.357)
Yes.
Allegra Grosek (19:48.106)
Then suddenly nothing was connecting. Like it wouldn't hook in the grooves anymore. And we were like, we just gotta call this quits. We were fighting. It was terrible. The next day we came back and we realized we had floored over like two Sharpies. And that's why nothing was fitting anymore.
Steph (20:06.404)
That's so funny. It's a classic flooring story.
Allegra Grosek (20:11.138)
Big shark. I don't even know how we managed to get some pieces to keep going, but eventually the house was like, nah, you might keep going.
Steph (20:19.752)
No, it's surprising like what will disturb the flooring. But yes, DIY is not your thing. And that's inspiring to a lot of people because a lot of people feel that way.
Allegra Grosek (20:32.958)
You do not have to be a DIYer to get a bunch of home rental projects done. I just, you know, this is tiny home episode, but I did just do a master bathroom update in my current primary residence and it took no time. It was super easy. Didn't hire a GC either. Like I did it, but I didn't touch one thing. I just pointed and put tape on the walls where I wanted everything to go.
Steph (20:37.496)
Yes.
Steph (20:53.089)
Right, right.
Steph (20:57.088)
Yeah, and you picked out the materials and you told, yeah, it's, it really does. You need to have a little, a little experience, a little bit of experience. And then you're like, oh, it really emboldens you to like, go forward with these projects and not have to spend, you know, 20% of the project cost on a, on a GC.
Allegra Grosek (21:15.754)
And this is what I say just generally with investing too, like there is no substitute for personal experience. Once you have personal experience, whether it's investing in the stock market, starting a business, buying real estate, renovating something, once you've done something once, you're just gonna feel so much more confident about doing that thing and more the next time. Which is why I was like, I mean, if Steph's gonna build a tiny home and she's Ms. Real Estate, how lucky am I?
to build a tiny home at the same time. Like, what can I add? I'm really good at negotiating and like managing budgets. So I'll do that. And then you tell me what you need for the house. I remember you were telling me so many things that I was like, I don't know this word. I can't think of them now, but it was like, just like all sorts of pieces inside of a house that you don't even really know the terms for.
Steph (21:50.926)
Yes.
Steph (21:54.913)
Ha ha ha!
Steph (22:07.532)
Totally. I mean, I feel like one of the hardest parts of building a house, but also just like doing any sort of project on your house is sequencing. And so like you were saying, you had to have the floors in before they could install the probably the countertops or the cabinets or whatever it was. And so having that like having that knowledge is it's nice to have, but it's also figure outable. And like, I just I do encourage you if you I love doing it together because it was fun. I love
doing things with my friends and that was a huge value to me. So if you have someone in mind that you're like, oh wait, I could do this with a friend who also has a house nearby or like in the same city, even if you don't have all the experience you can still do it.
Allegra Grosek (22:50.498)
Totally, it is so, so doable.
Steph (22:52.98)
Yes, yes, yes. And I always, before that I was like, I think I could build a house. And like knowing how houses go to fit together is so cool. We're in houses all the time. Why not know how they're constructed and what goes into it?
Allegra Grosek (23:05.694)
It was really cool to understand like when the electric goes in versus when the plumbing goes in. I think we're going to get to challenges, but I had a plumbing challenge.
Steph (23:17.572)
Yes. Okay. Actually, yes, we're here. We're challenges. What yeah, what was what stands out to you?
Allegra Grosek (23:23.638)
Okay, so what stands out to me, I don't know if you remember this, but so when you're building a back house and you're tying into your main house for the different utilities, the way we had to tie into our water for the toilet, it was basically building like 15 feet of pipe and a lot of it was outside of the ground because poop has to go down. So you have to have.
Steph (23:52.002)
Yes.
Allegra Grosek (23:53.138)
a downward slope going all the way to the connector at the street. And then I was like, well, what the hell are we going to do? This is like right up to the front door. You've got this poop pipe. And anyways, we created an outside deck and then we were like, oh, we can make it ADA compliant and have a wheelchair access thing as well. And so we built a ramp over the poop pipe. But that was definitely a shock that I had.
plan for and then we had to figure out some like vanity choices to get around.
Steph (24:25.524)
Yes, that is always like the pitch of the sewage pipe is important, very important so that you don't have backups. Obviously it needs to go down. It's solid in a lot of cases. We had that issue too. We had to build a bench type thing to like, you have to be creative. A lot of things come up during the process that you don't fully expect. It's just impossible to fully plan it out perfectly. So it's a...
exercise and flexibility and that is every single project having to do with a house. You've been through multiple that have not necessarily gone to plan. So, yeah, I think it builds character.
Allegra Grosek (25:07.894)
Mainly because I buy my houses with Steph and Steph's so bold. She's like, oh yeah, I'm sure you just tie it into this water and it'll be fine. Next thing you know, we've got a 15 foot trench diagonally across a tile living room. My husband will never let you live that one down, but you know, I learn as I go. And then I don't have to depend on Steph's like, I think that'll work.
Steph (25:17.253)
to the living room.
Oh, can't that...
Steph (25:28.036)
It's a lot of foundations, man.
Allegra Grosek (25:35.141)
This had nothing to do with the tiny house.
Steph (25:36.74)
Yes, but the sewage and the electrical, that's like a big piece of this puzzle and having to like tie that into the main house. And I mean, the biggest struggle that we are both facing now and the biggest advice that we probably both have is to get it permitted. Just to check with your city, see what's needed. A lot of cities are trending towards making this more legal, like having
Allegra Grosek (25:55.874)
Yeah.
Steph (26:05.1)
tiny houses and ADUs available to build, or like your lot is in compliance with having one built because they're looking for more density and we have a housing shortage and all of that. So that's great. However, going through the process, it is somewhat arduous and we opted to not do that. And that is public knowledge because we've been caught. So it's not a secret.
And that also goes to show that the boldness and the risk tolerance is not always good. It's been good for me in a lot of ways, but not...
Allegra Grosek (26:44.162)
be honest, I thought about that. You know, I knew we were sharing this and I always share as transparently as I can about money and building wealth and the setbacks and like, yeah, it's a setback that we have. We've been in a back permitting process now for like a year. We got caught and it's not great what we're having to deal with. But I don't regret it because as we'll talk about when we get into some of the numbers, we made the money back on building this house.
Steph (26:49.377)
Yes.
Steph (26:59.629)
Yeah.
Allegra Grosek (27:14.342)
you know, literally in a year and some and so it's a huge addition to the property that made the whole property value go up and Yeah, I learned a lot like I wouldn't give up the learnings. So that and my husband deals with the permitting process
Steph (27:28.885)
Yeah.
Steph (27:32.24)
Yes. Jake does not forgive me, but that's okay. I do think that in sports, you say either you win or you learn. And that is something that I think we've done both this time around. And we have these properties that are now two doors instead of one, and we've both opted. So let's get into the numbers a little bit. So we each spent about 30.
Allegra Grosek (27:59.646)
Can I say one other challenge that I remembered about building? I just didn't know that you had to put electrical wires underground. That was totally beyond my understanding. I was like, I see them up there, right? So that's where they are for everyone. And it's like, yeah, from the street, but then they have to go into your house. So we had just laid down sod. And we had to, you know.
Steph (28:03.633)
Oh yes, please please.
Steph (28:13.949)
Oh yes.
Steph (28:25.028)
Oh.
Allegra Grosek (28:28.23)
another diagonal cut through the yard to do that. So anyways, that was another challenge, but that one was really tiny. Grass grows very quickly.
Steph (28:35.264)
Yes, true. Okay, hold on, pause. I need to plug my computer in just a second.
Steph (29:11.84)
Okay, so challenges for sure. Like for me during the process, less so, just because I had like kind of gone through stuff like that before. I also have like a high tolerance for dealing with stuff, which I'm working on decreasing so that I don't have such a mental load. But during my like growth push phase, where we, in which we met, I was like, fine, doesn't matter. We've got it. We're gonna push forward.
Allegra Grosek (29:41.742)
nothing phase for y'all, I'm telling you. And then also that just kind of shows how our personalities were so different. Like I have this friend that is doing a bunch of stuff and the floor can fall through. She can fall through the floor and think it's funny. And like we learned and I can't add another piece of floor because I messed up something on my own and floored over a Sharpie and I am pissed and I'm bitching for two days.
Steph (29:42.741)
No.
Steph (29:55.168)
Yeah. Ew.
Allegra Grosek (30:11.478)
Your mindset really is such a big piece of this. And I was working on being, you know, less upset by little challenges along the way. And yeah, and that's because you were so like, great about not seeing anything as a challenge.
Steph (30:14.753)
Absolutely.
Steph (30:22.766)
Yes.
Steph (30:29.425)
Well, I think that you did a good job and remain doing your job doing that. Okay, hold on. I plugged in and it's still not charging. I don't know why. Hold on.
Allegra Grosek (30:41.334)
Maybe the plug you're using's not working.
Steph (30:56.868)
Here, here.
Steph (31:09.112)
Okay, we're back. Okay, so let's get into numbers briefly. And with the caveat that things are more expensive now, like this, if we did this exact same project right now, we would spend more money. However, we were extremely scrappy, we did not have GCs, and we did some ourselves. And so I spent a total of $34,000 on mine. What do you have?
Allegra Grosek (31:37.098)
looking at an old spreadsheet and it says 32,000 and change, but it must have been more than this because we did not DIY as much as you.
Steph (31:46.716)
I think yes, maybe so. Let's just call it 35,000, like each per. But right now I'm sure it would be some percentage more. I'm not sure exactly.
Allegra Grosek (32:00.17)
If I were to guess, I don't feel like you could build a tiny home in Austin for less than 50 grand. I don't know that, but that's just my gut.
Steph (32:04.673)
Yes.
Yeah, if we're being realistic, like I don't, we just don't want people to take away from this that we can go out and do this right now for 35,000.
Allegra Grosek (32:13.066)
Yeah, I would be expecting to pay post pandemic prices at this. And that's the other thing, like some of the contractors we were using were so grateful to have work. They were like, what else do you need? We got a fence fixed in the product. Like we were just doing other stuff because, you know, to our primary residents surrounding the tiny home build. But in this spreadsheet, I see a total of 32,000 and change.
Steph (32:17.344)
Yes, yes.
Steph (32:22.349)
Yeah.
Steph (32:32.461)
Yes.
Steph (32:36.836)
Um, the, this, we were planning this right like in February of 2020. Like I remember going to a coffee shop and meeting with you in person to do this, to like plan it out and then, and then the pandemic hit in mid-March. And so it was definitely like, Oh.
Allegra Grosek (32:54.474)
Yeah, I have dates on this. My first payout for this project was on February 18th, 2020. And my last payout was on May 17th.
Steph (33:08.108)
Yes, that makes sense. And that is so quick. Also another byproduct of doing this without permits. We were able to get it done really fast because we didn't have to wait on any inspectors. We didn't have to wait on anything. And so that is one of the reasons why it took so little time. And so this is, if you're going at this in the right ways, as we suggest, it's gonna take you a little bit longer. So just to be realistic and transparent.
Allegra Grosek (33:32.622)
Thanks for having me.
That's gonna be really painful for me when I actually do go about things the right way and get all my permitting. I'm not good at, patient is not something that people call me.
Steph (33:48.92)
No, and the admin and the hoop jumping that is necessary that seems so inefficient and inane will make me crazy. I don't get that mad that often, but when it's something that's unnecessary or busy work that my teachers used to give me, I would be filled with rage. So I... Yes.
Allegra Grosek (34:15.392)
I'm really not good with paperwork, so that's a problem.
Steph (34:19.764)
We're action oriented. So yes. But okay, so we both just looked at our spreadsheets and Allegro smartly did hers net. Mine is gross, but I was grossing on this property probably starting in May or June, about $3,000 a month. That's gross before cleaning fees. So I bet we are really similar in our nets. What was your net?
Allegra Grosek (34:46.85)
So I couldn't find my 2020 numbers, but I have all of my 2021 and 2022. And it looks like on average, I was grossing about 2,500 and taking home around 1,800. So we immediately put in a short-term rental management company, your mom's, to be specific. And that was actually amazing because,
Steph (35:01.869)
Okay.
Steph (35:09.205)
Yeah, yeah.
Allegra Grosek (35:14.634)
We had so many people coming through that back house and I was running Factora. There's no way I could have been self-managing it. But at the end of the day, you see a lot of money go out to your management company because they're charging like 20% and then the cleaning service is not included in that. So really big.
Steph (35:31.492)
cleaning. Yeah.
Allegra Grosek (35:36.894)
It feels really good when you see 3,500 come into your account, and then it feels less good when you have to like, subtract 1,500 from that.
Steph (35:45.624)
Yes, absolutely. I recommend for sure, if you're doing this in your backyard, try your hand at self-managing for a bit and then figure out what you like and what you're good at and then offload the other pieces. There's so much short-term renting going on now that there are people who do like purely the messaging or there's people who just, you can just hire out for cleaning. So I suggest trying it yourself first, but we have since,
progressed in our strategies past short-term rental. So these numbers we just shared are our short-term rental numbers. And now, what are you doing with yours?
Allegra Grosek (36:27.946)
Also, just to ballpark it, I think I made about 50,000 in the two and a half years that I was renting it. Then we decided there were some tiny homes that got built after getting some inspiration from us right next door. Even friend neighbors, fine, but they were self-managing and she was putting like chocolates on the pillow and doing really cute stuff and got in there and did all the furnishings herself,
Steph (36:37.109)
Okay.
Steph (36:52.865)
Yes.
Allegra Grosek (36:57.414)
I let the short-term management company do it. So like they were picking whatever and I wasn't too worried about it. So all of that to say our street got pretty saturated and I kind of saw it coming. And then we got caught for the back or for needing to permit and got into that process which made us want to not even rent out the back. So we switched from short-term to long-term like pretty early on. Like
Steph (37:01.997)
Yeah.
Steph (37:26.221)
Yeah.
Allegra Grosek (37:26.866)
in 2022 and then have been doing that ever since. So we actually just rent out the entire property, which is the main two, one house that has like an attic office and then the back house that they can use as an additional guest room or office, but they can't rent it out to other people. And that's been going really well. All of our properties now.
are with long-term rentals and we prefer it. We've done both and we just like having a direct relationship with our tenants as of now. I think one day we'll have a property manager. But that has worked great, a little easier than the management company because the management company still needs answers. And like there's so much stuff you're buying for these houses. Like you need toilet paper all the time. You need coffee, you need soda waters. And for us,
Steph (38:13.73)
Yes.
Allegra Grosek (38:20.502)
to streamline, we just decided to kind of get ahead of the curb and long-term rent, and that's going really well.
Steph (38:27.468)
I think that is such a good thing to bring up is those hidden costs in short-term renting is the supplies. Obviously, the cleaning is something people think about, but there's a lot of other things that don't really go thought about and really could make a difference in how much you're actually netting every month in short-term rental. When you think about how much more of a lift it is to have an Airbnb than to have long-term tenants.
it could be worth it to take the like quote unquote cut in income to long term, you might find that it's actually not that big of a cut after all of a sudden done because your tenants probably pay for the utilities, right? Yeah.
Allegra Grosek (39:07.182)
Correct, so that was something we were doing before. And yeah, I think, you know, and then like, you can't pay for, or you can't pay enough for, in my opinion, peace of mind. And with the short term rental market, because it was so hot and really popping at one point, like if one made service doesn't come and there's ants or whatever, suddenly your reviews drop, you lose your algorithm, it just didn't.
feel right for us. But again, I know so many people who short-term who love it and it was like, we tried it, we did it for two years. And then we ultimately just decided like, let's long-term like our other properties because that feels more simple. And like you pay for your yard cleanup and your water and heat and like we don't have to deal with anything.
Steph (39:51.597)
Yeah.
Steph (39:59.588)
Totally. I love that, I mean, you basically paid yourself back one and a half times in short-term rental and then you transition to long-term. And I think that's a great progression of like, you know, you don't have to choose one strategy and stick with it forever. I love the idea of paying yourself back and then having that long-term rental income be just like steady without having to do much. And you're able to rent the whole property out for way more than you would have without the tiny Haman.
Allegra Grosek (40:24.642)
Totally, totally. And actually something that you used to talk about a lot is cash on cash return. How much money are you putting in initially and how fast until you can get that back? And the point you just made right now that I was able to pay myself back one and a half times pretty quickly, I didn't even set out to do that on purpose. I was just like, let's try short-term rentals because there weren't a bunch of tiny houses on my street at that point.
Steph (40:54.019)
Yeah.
Allegra Grosek (40:54.33)
and then they became super popular. So then I transitioned. But I do think someone setting out could do it like that. I always talk about short-term pain for long-term gain. How much less can you spend on yourself right now so future you has more money in their investment accounts? And it's the same thing with this. Am I willing to have strangers walking through my backyard and deal with supplying this?
Airbnb every few days with stuff and talking to the short-term management company and handling like disgruntled customers right now for myself to get paid back in a year and a half. Sure. But I'm just saying I didn't even look at it like that until you're repeating it back. So, maybe in the future I would look at doing another one. Like, okay, well, how quickly can I get paid back doing one version and then switch it to something that is more peace of mind?
Steph (41:49.58)
Yes, I love it. And I think there's a lot of people who might want extra space in their house in general, and this could be a good way to do it. Do this, do short term up for a year and then pass that. You can pop it on there for ACL, for South By, for big festivals in your town. And then
Allegra Grosek (42:05.09)
Well, and actually the really cool thing we did because we already had the management company set up is that we would rent our main house for those events. Like we already had them and then we said, can you also manage our main house when we go out of town? So anytime we went on vacation, we'd throw our main house up. But this was a house that like, we didn't have children in, we didn't have nice stuff in. We still are Craig's List and Ikea era.
Steph (42:12.85)
Right, right.
Steph (42:26.766)
Right.
Steph (42:32.48)
Yes, yes, yes.
Allegra Grosek (42:32.978)
Now, I don't care about renting my house when I'm on vacation. In fact, I don't want to, but I can totally see in the future if I were to buy a property where I build a back house, depending on the layout, I can see myself just renting the back house when I'm out of town or the back house for certain events. Otherwise, I'd rather just have it as extra space for my family.
Steph (42:52.932)
Totally, exactly. That the flexibility that it provides, having like another space that's not connected, that you don't have to share at all, it's amazing. And that's whether it's family, whether it's an office, you know, there's just so much you can use it for. And having it for essentially free, if you pay for it for the first year in short-term rental, you're golden for the rest of your time owning that property. The other thing is people are obsessed. I work with, we work with buyers every single day.
most of those people would prefer to buy a house with an ADU in the backyard. And so the value that it adds on the backend when you go to sell is just huge. So yeah, all in all, it's compounding returns and potentially infinite ROI, which I love. Okay. So let's go to... Oh, I also have
Steph (43:51.068)
So we have one tenant for the whole entire property, which is both houses. They do have the ability to rent the back house out. We put that explicitly in to the lease, which is an interesting model as well. Like they were willing to pay the rent that we wanted and they can essentially house hack their rental, potentially to like very little, which I like to provide that opportunity for people. Not everyone wants that risk because obviously they're managing it. There's other people coming onto the property,
But yeah, we're getting way more than we would have gotten had we only just had that main house on there. So all in all, regardless of the hassle, we're caught in our non-permitting situation, but it was worth it for me.
Allegra Grosek (44:40.362)
It was worth it for me too. I mean, again, the thing that will suck about getting properly permitted is that we didn't build far enough from the setback to be a full accessory dwelling unit, meaning people aren't technically allowed to sleep there, but we'll be able to take out the kitchenette and just be an accessory structure, which means anyone can studio in there or office or, you know.
Steph (45:09.036)
Yeah. Right. I wonder too, have you updated it since they passed that home? Okay. That's a bummer.
Allegra Grosek (45:16.394)
Yeah, we checked that one. It doesn't work for us. But that is the thing. We have been hoping that because of the density issues, more of these restrictions will loosen while we're still going through the process because the process is really long. So that is why I prefer being in the back permitting process afterwards because rules and regulations are more likely to change now than when we were trying to get them done. I mean, truly nothing was happening during COVID.
in their government offices. So we would have been at a huge loss. We would have been in the middle of a project with just like open structure for months. So I don't regret how we do it. I'm just sharing this so that people know, like you gotta have your wits about you. You have to have the, if you're not gonna permit on the front end, you have to be willing to take the penalty and deal with it later.
Steph (45:47.565)
No.
Steph (46:09.16)
Yeah, totally. I think that I agree. Like even if I knew that this was going to happen, I might have done it anyway so that I would have the income so that I get it on the market as quickly as possible and then go back and say, okay, now I can retroactively and do everything I can to the best of my knowledge upfront to make sure that retroactive permitting will be easier. Yeah.
Allegra Grosek (46:32.598)
Which we did do. I mean, we did all electric decode, all plumbing decode. Like we didn't build like not secure structures. Like they're really quality. Like we put them on parent beams. Like we did not need to do that. These are 240 square foot boxes that are really, really cute with a full bathroom, like a four foot shower. Like they're nice. We did as much as we could, right? We just got a few things wrong.
Steph (46:40.947)
Right.
Yeah. Yes. True. Yeah.
Steph (47:01.428)
Yeah, absolutely. And I think that having each other to go through this with, it was definitely more fun. It was, we definitely got a deal and we were able to like be creative and innovate together, which is, you know, all you can ask out of life. Yeah.
Allegra Grosek (47:22.362)
It was honestly so fun. This was like such a great COVID project and living next to each other and being able, basically we decided since Steph has done more of this that her house would go first. So like they poured her peering beams, they came over and poured mine. They put up her structure, they came over and did mine. Like basically she would get her walls then I would get my walls. You know, like it was kind of a one-two assembly line and that was really fun. I learned so much. So even if you just have a friend who is
Steph (47:33.72)
Yeah.
Allegra Grosek (47:51.334)
more experience with this stuff. And they're doing a bathroom renovation in their house and you wanna do one in your house, like ask to go over. I mean, Steph let me come over all the time and I would just watch her doing some of her DIY work and be like, nah, not for me.
Steph (48:10.112)
No, thank you. I would also like to say I was not formally educated in the realm of construction. I learned as I went and I, you know, YouTube University, the blind confidence piece of my brain just like allowed me to learn these things and it's not for everyone. So I encourage you to not write this off even if you're not handy. But...
But yeah, I love it. And I think moving forward, like my learnings from this project, I do prefer a roll on Tiny Home. I like the ease, you know, like the roll on Tiny Home, you're buying it, it costs more than this cost us, but you're not having to go through the process, you know, there's something to it. But we weren't able to do that because we didn't have enough space.
Allegra Grosek (49:03.618)
Right, and I actually really agree with you. I like the prefab stuff. I see so many options now that maybe I didn't notice before, but I do really think tiny homes have gotten, at least in Austin, so popular since the pandemic and the density issues that if I were, or probably when I do this again, I would buy a prefab thing that, by the way, I didn't have to pay out in cash, that I could just put it on a card and pay it off before a zero interest situation.
Steph (49:07.361)
Yes.
Steph (49:28.324)
Fine is it.
Steph (49:32.876)
Totally. I mean, the RV loan situation that we've employed is amazing. It's low-ish interest and you only have to put 20% down on 70 to $100,000. Very, very worth it to me. But I'm still glad that we had this experience and we did it and we now have it forever.
Allegra Grosek (49:56.622)
how comfortable we are talking about different financing options, different renovation experiences. You just can't talk about this stuff unless you try it. That's why I'm always like, there's no substitute for just trying. Just give it a go and you can pivot.
Steph (50:13.604)
This could never go. Yeah, yeah. And you can always have it. Yes. Oh, oh, the last thing I want to say, these houses, again, they're about a block apart, two blocks apart. We're not walking anything. It's not like a shiny neighborhood that's exceptionally close to touristic attractions. That's another thing that people are like, oh, well, I would want to do this, but I don't live in a good location for Airbnb. I would challenge that.
Allegra Grosek (50:44.634)
Yeah, I don't disagree. I also think, you know, we have been living on and developing as part of East Austin's up and comments. And so we almost know that things will continue to be it's almost like the reason I wanted a long term rent. When I saw the market saturation, the reason I wanted to be in this neighborhood before it was a great neighborhood to raise kids in it's like you just you kind of want to go.
Steph (50:56.802)
Yeah.
Allegra Grosek (51:12.446)
in the direction the puck is going before it's there because that's how you get the good deals. I mean, Steph, how much did you buy that house for initially? Bought that house for 180, what year? Okay, I bought a similar house in 2019. Wait, you bought it in 2018? 2013, okay. I bought six years later and mine was 385. So, but instead of being like, oh boo hoo, I didn't get something.
Steph (51:16.568)
Yes.
180.
Steph (51:22.82)
2013.
Steph (51:30.22)
No, sorry, 2013. Yeah.
Steph (51:36.085)
Yeah.
Allegra Grosek (51:40.63)
at that price a long time ago, I still did it. And that is, you know, this is back to the time in market. I'd rather just try, I'd rather pivot, I'd rather do what works for my overall wealth goals.
Steph (51:48.308)
Absolutely.
Steph (51:54.388)
Yeah, totally. And with our added unit, now both of those houses are worth probably about $500. So having that value added is not just, you know, we put in $35K, we earned that back already and we have the value that's there because we put that in. It's just like ROI on top of ROI. So yeah, I highly recommend. People are more and more willing to live long term in tiny homes too.
Allegra Grosek (52:02.19)
for sure.
Allegra Grosek (52:32.31)
Lot of options.
Steph (52:48.13)
Um, I'm back. Did you hear me? I need a new computer. Just shuts myself down. Uh, okay.
Allegra Grosek (52:49.902)
I love you too!
Allegra Grosek (53:00.15)
No, this was a really fun episode. Thanks for having me. I always love talking about investing and doing cool shit. And that was a really cool experience to build a home simultaneously with a good friend in a time where there was nothing else to do.
Steph (53:08.127)
Ah, sit.
Steph (53:15.034)
Yes.
Steph (53:18.782)
Yeah, that was all we had. That was so fun. Okay, I will talk to you later today. But thank you for, yes. And thank you for listening. Bye.
Allegra Grosek (53:26.909)
Okay, on five.
Allegra Grosek (53:31.4)
Bye.