After buying her first rehab rental property at the age of 22, Christina VanDergrift took her profits and turned them into a highly diversified portfolio. She now owns a variety of commercial properties, along with vacation rentals and single-family investments. Today, we’re talking with Christina about the growing popularity of vacation rentals, why she loves adding office spaces to her portfolio, and the reasons commercial investing may bring in more guaranteed income in the current state of the market.
Christina VanDergrift Real Estate Background:
- Full-time broker/owner of two real estate brokerages — one that handles real estate sales/leasing in PA & NY and another that does vacation rental management in PA.
- Owns a variety of commercial properties that house her own businesses and some that are leased by others. She currently manages all of her properties but one.
- Personally owns a variety of commercial properties, from a car wash to real estate offices and professional offices. She has a growing number of vacation rental properties across the country; a couple of hundred acres of land with oil, gas, and mineral rights; single-family rentals; multifamily rentals; etc.
- Based in Wellsboro, PA
- Say hi to her at: christina-vandergrift.com
- Best Ever Book: The Infinite Game
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TRANSCRIPTION
Ash Patel: Hello, Best Ever listeners. Welcome to the Best Real Estate Investing Advice Ever Show. I’m Ash Patel and I’m with today’s guest, Christina VanDergrift. Christina is joining us from Wellsboro, Pennsylvania. She’s a full-time broker and owns two brokerages in Pennsylvania and in New York. Christina owns and operates several commercial properties, including office, vacation rentals, a car wash and hundreds of acres of oil and gas that have mineral rights as well.
Christina, thank you so much for joining us today, and how are you?
Christina VanDergrift: I’m doing great. Thank you so much for having me today.
Ash Patel: Thank you so much for joining us. Before we get started, can you give the Best Ever listeners a little bit more about your background and what you’re focused on now?
Christina VanDergrift: Sure. So I have been in real estate since 2005. I started off as just a realtor and worked my way up into owning the company, getting involved in single-family rentals, commercial rentals, and then eventually into vacation rentals also. And I own and operate, like you said, a variety of businesses, from a vacation rental management company, to a car wash and a settlement company. So we’re very diverse.
Ash Patel: Yeah, what a unique background. So you were in the rental business for single families and commercial properties…
Christina VanDergrift: Correct.
Ash Patel: And did you have an epiphany, why do people do single-family when there’s commercial opportunities out there?
Christina VanDergrift: So for me, the single-family was like, a get-my-feet-wet situation, I think. I’d seen so many others do it as far as clients. So I knew I wanted to invest in real estate. I started selling when I was 20, so I started investing when I was 22. And once we got into the commercial industry though, it’s night and day; you don’t have people trashing your houses and not paying their rent, potentially… And then, as I said, vacation rentals. And that took it one step further because it’s fun, you have the potential to make more money, and you can be as involved or as hands-off as you would like to be also.
Ash Patel: At 22 years old, you had your first investment. What was that?
Christina VanDergrift: It was my very first house, and it was crazy, because not many 22-year-old females are buying homes… And I did it despite my dad telling me I was an idiot to do so, because it needed a lot of work… And I kept it for a few years, put a lot of blood, sweat and tears into it, and then upsized, and then that property ended up being my first traditional rental. And once I got a taste of it and could see the potential in the equity and everything I was building and tax write-offs, I’m like, “Oh my gosh, we need to do more.” So I have gotten married in the scheme of all of that, and my husband was a big no person for the longest time, and 10 years later, now that he’s seen everything, he says yes 99% of the time, thankfully.
Ash Patel: Did you ask your dad for help on that first rehab or were you destined to prove him wrong and do it yourself?
Christina VanDergrift: Oh, my gosh… So I took him through there just because I felt like I needed his blessing, and I proved him wrong, like many other things in life—
Ash Patel: You did it all on your own.
Christina VanDergrift: Yeah, ripping and tearing, and there were days that I just wanted to sell it or have it bulldozed over. But real estate, for me and for most people, is such a safe investment opportunity, and it was a no-brainer. And I like to rub it in his face that that single investment then turned into two houses, and then four houses and then land, and everything else from that same equity that has grown.
Ash Patel: Alright, take us back there. You have one under your belt, you turn it into a rental; what’s next?
Christina VanDergrift: So we ended up continuing to do it and using equity to just buy more, and building that equity. And in the midst of all of that, my mom, who had owned our brokerage, decided to sell. So that was the next big project that we did, was buying the property and then growing that business, which – as scary as it was, then led us into the opportunities to buy many other properties and other exposure to commercial and everything else that we’re doing.
Ash Patel: What did your dad think when he found out you wanted to buy the brokerage?
Christina VanDergrift: At that point, him and my mom had actually split up, so he was like, “Well, good luck with that.” He was like, “I’m sure you could do it better than your mom.” But no, my dad – it’s funny; he’s a pessimistic person, but now he says he did that to help push me and motivate me. At the time, I know he was waiting for me to fail, but I think that we have a lot of those people in our lives, and we just have to dig in and lean in and work, and over time, it’ll compound.
Ash Patel: Christina, how old were you when you took over the brokerage?
Christina VanDergrift: I was 29.
Ash Patel: Okay, so you’ve got about seven years of experience in real estate, and now you’re doing commercial and residential. What was that transition like?
Christina VanDergrift: Even though I had seen so many other people do it, it was so interesting, especially when we would occupy our own businesses and our commercial spaces, too – a huge benefit and a huge eye-opener, just because it’s just a whole different world, different clientele, and it made me want to continue to do more, which then gave me the motivation to build a car wash, and to open it up to a settlement company, and we own all those buildings also.
Ash Patel: What, you didn’t buy a carwash, you built one?
Christina VanDergrift: No, we literally built one from the ground up. And ironically, we closed on Mountain Valley in June of ’16. We opened Six West settlements in January ’17, and in ’18, when we committed to buying the property across the street from our real estate company and build a car wash, that same week we found out my husband’s position at Shell as a Construction Superintendent was going to be eliminated. So it was my opportunity, sink or swim, to dig in and figure it out. And as scary as it was going $1.5 million in debt at that point to literally from the ground up build a car wash from scratch, that was such a blessing, because he did a lot of the work himself and managed the contractors, too.
Ash Patel: Why a car wash? I can think of a million other things to build…
Christina VanDergrift: So it’s a crazy story, but they would have it—a few years before that, I was on a motorcycle trip in Florida, and there was a gentleman on a trip with us that owned car washes. And just something about having passive income – or at least you think it’s passive, and when you have one, it’s a whole different thing, because there’s people and then maintenance every day and everything else… But I had that gut feeling that I needed to do it. And there was a vacant lot across the street from my real estate office, and I pictured it there. And I had approached the owner at that point to sell it, and he wasn’t ready. And three years later, he ended up being ready, and we made it happen.
Ash Patel: Yeah. So they’re not passive, just like laundromats and—people think you just go there, collect money—
Christina VanDergrift: Exactly.
Ash Patel: —but it’s a tremendous amount of work.
Christina VanDergrift: Right. Right.
Ash Patel: Would you have done it over again, in hindsight?
Christina VanDergrift: Definitely. Oh my gosh, for sure. The timing, like I said, was crazy, because Jeremy – his position was eliminated, and we leaned in… But we were open one month before the world shut down because of COVID. So that was the scary part. We got through it though, and this year it’s been going gangbusters, thankfully.
Ash Patel: Alright, so the short-term rentals – how did you get into that?
Christina VanDergrift: I had been exposed to them through clients’ properties I’ve sold, and got to see the inside as far as the financials for listing and selling them to others. So that was definitely intriguing. A client of mine had been interested in properties locally, and when I approached him about a commercial listing I had, he said, “We’re actually buying in Florida now, we’re buying vacation rentals, and they’re very lucrative.” And again, I got the feeling that “Maybe we should try it and do it… And we work 24/7. Maybe we should have a place to go on vacation to that other people pay for”, was the initial thought path. And then we bought it, we started from scratch and had a property manager, and then other properties locally in our area came up for sale, and I’m like, “Oh my gosh, we need to do this locally.” And I talk about it in a book that I have just released recently, but literally, the first one, when I bought it—we mostly bought the property because it was 10 acres, it was near our home, and we wanted to have that control of the land and everything else. And my business plan showed it making maybe 30 grand a year, and last year it did 80 grand. And this year, it’s due to do $90,000. They make so much more money than traditional rentals, and—
Ash Patel: What’s on the 10 acres?
Christina VanDergrift: [unintelligible [00:11:24].09] for like 20 and 30 miles, and deer, and a lot of nothing.
Ash Patel: So is it a house and then it’s on 10 acres?
Christina VanDergrift: Yes. Correct. It is a chalet-style modular home on a raised basement, and it has decks all around it and views for miles. So it’s like a mountain home basically, and it sits on a hilltop, and close to town, but no neighbors.
Ash Patel: So people rent that for the experience.
Christina VanDergrift: Definitely.
Ash Patel: Got it. And how about the office buildings?
Christina VanDergrift: As far as?
Ash Patel: Investments.
Christina VanDergrift: We have real estate offices, we have other traditional offices, we recently purchased a 10,000 square foot old 1880’s brick building on the main street in our town that has eight different commercial spaces in it, too. I love having the diversity of all of it, especially after years like last year.
Ash Patel: Repeat that one more time then. The purchase that you just made, what was that?
Christina VanDergrift: It was a 10,000 square foot 1880’s building.
Ash Patel: And what kind of condition is it in today?
Christina VanDergrift: It’s in great condition, it was well-maintained.
Ash Patel: Okay.
Christina VanDergrift: And it was in the same family for over 100 years.
Ash Patel: Was it fully leased?
Christina VanDergrift: No. It was about 75% occupied.
Ash Patel: Okay. What types of tenants are in there?
Christina VanDergrift: There is everything from a bank, to an orthodontist, to a gas company, and then we’re going to be occupying some space ourselves.
Ash Patel: Any apartments or is it all commercial?
Christina VanDergrift: Yeah, it’s all commercial.
Ash Patel: Okay. So it’s a bit of a value-add, because you bought it with 75% occupancy?
Christina VanDergrift: Exactly.
Ash Patel: Yeah. What kind of returns do you think you’ll make on that, cash-on-cash returns?
Christina VanDergrift: Oh gosh. I would say, we should see a good return in the next couple years. When we bought it, we had $100,000 of instant equity in it, which was nice. We put about $100,000 out of our pocket, and after we have full occupancy, we should be bringing in about 100 or so a year.
Ash Patel: Okay, wonderful. And then the land, how did that come about?
Christina VanDergrift: My husband actually, when we got together, lived on — it’s a family farm. His great grandparents bought our property in 1919, and it was an old ferry farm years ago with 86 acres. So we bought other surrounding properties around it, and we also own 100 acres up in New York State too, that we bought for hunting, and also for the investment, and to eventually have a vacation rental on it when the construction is done.
Ash Patel: And then the gas, oil and mineral rights.
Christina VanDergrift: Mm-hmm.
Ash Patel: Are you mining anything right now?
Christina VanDergrift: Because of the state of the world right now, the gas industry has slowed down very much in our area. The cost of gas prices has gone down so much since 10 years ago. Back at that point, all the gas companies were trying to get here into the Marcellus and Utica Shales and developing it, and it just wasn’t profitable the last few years because of the gas prices. So the new drilling hasn’t been happening as often, but they still have the existing ones that are connected producing.
Ash Patel: And did you buy the land because of what’s buried underneath?
Christina VanDergrift: Actually, no. We bought it mostly just,- it sounds silly, but for our own use and the sentimental value. And they don’t make more land, so anytime we have an opportunity to do that, we try and do it.
Ash Patel: Good. So in terms of investing in real estate, what advice would you give to that residential investor that thinks commercial’s too difficult, too much money, too big of a learning curve?
Christina VanDergrift: I would honestly say that—I have had some doozies of traditional tenants… That commercial is just so much more streamlined. The financing is honestly easier, because they look at totally different things. And it’s more of a guaranteed income; especially this past year with all the rent moratoriums, the commercial spaces still had to pay rent, whereas the other landlords were affected with their tenants potentially not having to, with the state of the world. But definitely, I can sleep at night knowing that they’re taking care of my properties, because they have people coming into them, and they want to maintain them… Whereas we’ve had tenants catch houses on fire and leave them disgusting, and all sorts of damage. And when you look at the potential income, it’s night and day.
Ash Patel: Yeah. So when you say that the commercial tenants have to pay rent, what does that mean?
Christina VanDergrift: They are obligated with their lease, and because of these government incentives that have been out there for residential tenants to potentially not have to pay, there’s been no evictions happening. It’s unfortunate, in some instances, for the businesses that have had to close; it’s more cut and dry. But on the landlord side of it, it’s more guaranteed income.
Ash Patel: And have you had commercial tenants that broke a lease?
Christina VanDergrift: No.
Ash Patel: Okay. I’ll give you my opinion on that, and how I handle things. If it’s a national tenant, if Starbucks is one of your tenants, and they say, “Hey, we’re going to leave early and break our 10-year lease”, you say, “Well, no, you really can’t. You have a 10-year lease, it’s corporate guaranteed.” And you’re really not going to hurt their pockets, right?
Christina VanDergrift: Right.
Ash Patel: I think they have 19,000 stores out there; they signed the lease, they’re big boys and girls, and they’re obligated to pay, and they know that. When you have a dentist, an orthodontist, a small business, a flower shop, a hair salon, even though they signed that three, four or five-year lease, if their business goes out and they can’t afford to pay you rent, then there’s really not a lot to go after, because now you’re digging into their pockets, right?
Christina VanDergrift: Right.
Ash Patel: So the way that I look at that is during that eviction moratorium and when we had the whole lockdown, I only had one tenant, that was a salon, ask if they can have two months of no rent. Awesome, no problem. I had another tenant who said, “Hey, I can’t afford to pay this month,” she was a photographer, “but when I get my stimulus check next month, I will give you that.” I thought that was very noble of her. If she was a new tenant, I was curious to see if she was going to actually follow through with that. And sure thing, she paid two months when she got her stimulus check, and I told her, “That was an awesome thing to do. Your next rent is on me.” But unless you have a national tenant, a tenant can break their lease. And unless you’re going to sue them and try to go after their personal assets, it’s not as cut and dry, right? And that’s my opinion.
Christina VanDergrift: Right.
Ash Patel: When you have a regional company and they have a corporate-backed lease, it’s more guaranteed during any shutdowns or whatever; you can choose to work with them, but you know that you’re not personally hurting them if you choose not to.
Christina VanDergrift: Right.
Ash Patel: But I do like what you said, they don’t destroy your place because they’re professionals, they’re business owners, right?
Christina VanDergrift: Right.
Ash Patel: Versus professional tenants, who I’ve had the same experience with, and have houses destroyed.
Christina VanDergrift: Yeah.
Ash Patel: They were given pristine houses, and they were just destroyed. So thank you for sharing that.
Christina VanDergrift: Case by case, you have to have a heart, and it all depends on the circumstances and everything else. I’ve worked with tenants and I’ve worked with my residential tenants also.
Ash Patel: Yeah, you do the right thing. So if they’re just a residential tenant, if they’re trying to do the right thing, like you said, you work with them. But if they are just professional tenants, argh.
Christina VanDergrift: Oh, yeah.
Ash Patel: What’s next for you? You’ve done some crazy stuff – land, carwash, 150-year-old buildings…
Christina VanDergrift: Yeah, we really are leaning into the vacation and the short-term rental aspect of things. And I would love to develop a property and have cabins or tiny houses or everything on it, so that we can continue investing in bigger parcels, but also capture that return of the income and offering experiences for people… Because it’s just so rewarding and so much fun. So definitely, I would like to do that and continue to grow that portfolio.
Ash Patel: And Christina, when you say “develop”, that’s buying land and putting something on there.
Christina VanDergrift: Correct. Yep. Septics, wells, all the excavating, everything.
Ash Patel: What areas are you looking in?
Christina VanDergrift: We’ve been so lucrative where we are in Northern Pennsylvania because it’s very rural. In the era of social distancing, it’s been a big thing. We also have rentals in Gatlinburg; that’s another mountainous area. We’ve recently sold ours in Florida, just because “you buy low, sell high” and we had to, because it was ridiculous how high the prices were going for… But definitely, I think our go-to is just high-travel tourist areas that you can buy at an affordable price and then really capture on the income and the investing side of it.
Ash Patel: Pennsylvania – is that going to be a seasonal rental, or is that rented year-round?
Christina VanDergrift: Ours are year-round. It’s unbelievable. Even when there’s snow and ice, we have turnovers the same day; it blows my mind.
Ash Patel: And is it families? Is it people coming out to hunt?
Christina VanDergrift: Primarily, couples, families. I see a lot of multi-generational families traveling together. And with short-term rentals, they generally have more space than someone’s staying at a hotel room, so they can do that and all stay together.
Ash Patel: And because that market is so hot, are you able to find a deal on something that’s ready to go, turnkey, short-term rental?
Christina VanDergrift: I have. Last year we bought one in Gatlinburg that was an existing vacation rental, and literally closed on it, and did a 1031 exchange on it on one of my single-family rentals… And the first month, it grossed over five grand. And it was literally furnished, I had to do nothing but transfer the utilities.
Ash Patel: So that’s one of the hottest vacation areas around.
Christina VanDergrift: It is.
Ash Patel: How did you get the deal on that?
Christina VanDergrift: It was one of those “timing is everything” moments, honestly. We were selling a property here and I’m like—I didn’t want to pay capital gains, and I’m like, “What am I going to reinvest it into?” And it was just fate. I was sitting down, found the place on Zillow, we looked at it via FaceTime, and it had been under contract and the lady who was buying it had lost her job—well, had a leave of absence with it. So she didn’t want to buy it anymore, and we were the first people to inquire on it, and the rest is history.
Ash Patel: Would you build another car wash?
Christina VanDergrift: Definitely.
Ash Patel: Would you, really?
Christina VanDergrift: Yeah.
Ash Patel: Wow.
Christina VanDergrift: My husband manages that and he’s the guy that does day-to-day, and one of my kids does — like after school, he’ll go and clean it. But now that we have gone through it and all the complexities of it and have kind of ironed it out, we definitely would. That first year was so scary, because there was no traffic, and it was a huge undertaking; car washes are such a complex project. But now I think we have that branding and we would definitely continue to.
Ash Patel: Is that a franchised car wash, or is that one that you just—
Christina VanDergrift: No, that is one that I came up with the name, the logo, the design, the colors and everything.
Ash Patel: What’s the name of it?
Christina VanDergrift: Tioga Street Carwash.
Ash Patel: Okay. So if you opened another one—
Christina VanDergrift: It would be—
Ash Patel: —you’re not going to be able to call it Tioga Street Carwash.
Christina VanDergrift: It might be the Tioga 2.
Ash Patel: Wow. Okay. All right. Awesome. Christina, what is your best real estate investing advice ever?
Christina VanDergrift: I would say that my best real estate investing advice ever is – it doesn’t matter who you are, where you’re from, you can get into the game. When I bought my first house, I had $3,000 of my own money down, which then turned into $40,000 in equity, which then was $60,000, and it just has continued to grow. Sometimes you have to get creative, but you have to commit and figure it out. Like Grant Cardone says in the 10X Rule, “You commit and you figure it out later.”
Ash Patel: “And don’t listen to your dad when he says don’t do it.”
Christina VanDergrift: Exactly. Don’t listen to people who have not been there themselves.
Ash Patel: Yeah. My parents did the same thing to me. It actually cost me about 10 years, because I had — I think it was a four family; I was going to live in one and rent out the others. I was all set, and they’re like, “Hey, that’s such a dumb thing to do. We lost a ton of money in real estate. Why would you do that?” And I’m like, “Oh, no.” It made me rethink everything.
Christina VanDergrift: Yeah.
Ash Patel: Did a 10-year pause, and then got into it and found my calling.
Christina VanDergrift: Yeah.
Ash Patel: So yeah, thanks, Mom and Dad.
Christina VanDergrift: Yeah, yeah.
Ash Patel: Christina, are you ready for the Best Ever lightning round?
Christina VanDergrift: I am, I think.
Ash Patel: Alright. Christina, what’s the best ever book you recently read?
Christina VanDergrift: The Infinite Game by Simon Sinek.
Ash Patel: What was your big takeaway from that?
Christina VanDergrift: I think that my biggest takeaway was, we all think that there’s an end game, there’s a final destination, and we forget that life and careers and investing and everything is infinite, and it continually changes and grows. So you have to continue to do the right thing and have integrity along the way, and it will come back around. And I really liked it a lot.
Ash Patel: Christina, what’s the best ever way you like to give back?
Christina VanDergrift: I love coaching people and building them up and getting them out of their comfort zones. We do a lot locally also; co-drives, and we have a car show coming up the near future… That’s a charity benefit at our car wash. But ultimately, around the board, I just like to encourage and empower people to get out of their comfort zones.
Ash Patel: Christina, how can the Best Ever listeners reach out to you?
Christina VanDergrift: Definitely connect with me on social media. On Instagram, it’s Christina VanDergrift. And also my website would be the best, it’s christina-vandergrift.com. And I have my blog, I do coaching, I have courses on investing in real estate and short-term rentals also.
Ash Patel: And you mentioned a book. Tell me about that.
Christina VanDergrift: Yes. So my book is Vacation Rentals: The Ultimate Guide. You can get it through my website. It’s also on Barnes & Noble, and Amazon. It has all the highs and lows, and trials and errors, and it’s a streamlined guide for you to get into the industry yourself, and it even coaches you if you don’t have down money, how to creatively come up with it, too.
Ash Patel: Christina, thank you so much for sharing your story with us today. Your can-do attitude, along with your free spirit, has gotten you where you are today, with starting out as a realtor your first rental property and going into commercial properties, owning the brokerage that your mom had… What an amazing journey, so thank you so much for sharing that with us.
Christina VanDergrift: Thank you very much for having me.
Ash Patel: Best Ever listeners, thank you for joining us and have a best ever day.
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