Episode 97: How to Prepare Your Finances for Homeownership with Zinnia Adams

Acquania Escarne 0:00

Welcome back to The Purpose of Money Podcast today I'm super excited. I have Zinnia Adams with me. She is a real estate investor and author and a wonderful financial education coach that is going to talk to us today about how she bought a house and lost it by 27 paid off 50,000 in debt, and is now in a better position to teach other people about how to handle their finances.

You are listening to The Purpose of Money Podcast, a podcast where we talk about ways to build wealth and create more freedom in your life today. I am your hosts Acquania Escarne.

Have I ever told you about that time, I took $40,000 out of life insurance and purchased three properties in one year. Yep, that really happened in 2016 and now the rest is history, I have a real estate portfolio of over $34 million, and it includes apartment rentals and hotels.

I want to teach you how to leverage life insurance to build your own real estate portfolio and so much more.

Check out my new course The Purpose of Money Maximizer where I teach you the power of life insurance and why it's a guaranteed way to build generational wealth. I also teach you how to learn exactly how much insurance you need and in this course we talk about how to build enough cash and a life insurance policy so that you can use it to invest in real estate just like I did.

If you're even just slightly curious about this, check out the course The Purpose of Money Maximizer at thepurposeofmoneymaximizer.com That's www.thepurposeofmoneymaximizer.com

Zinnia is the creator and founder of Perspectives a personal finance education brand. Her financial obstacles and triumphs of her own inspired her to become a personal finance educator after self correcting her finances, paying her way through undergrad and eliminating 50,000 in debt to become a real estate investor.

Nia uses her own story and experiences to help individuals change their relationship with money and in her book Life is Short Buy The House: The Ultimate Guide to Prepare for Home Ownership. Nia shares the story of how she bought her house and lost her home at the age of 27. The book helps individuals prepare their finances before becoming a homeowner, so they don't make the same mistake she did.

Nia is on a mission to transform women from struggling and stress to empowered about money and on the road to financial stability. Nia is born and raised in Chicago, and is a speaker certified financial education instructor, a real estate investor, and an all

Hey, girl, how you doing?

Zinnia Adams 2:52

Good. How are you?

Acquania Escarne 2:54

Oh, that is awesome. That is a mouthful of achievement and I can't wait to dive into your story. But first, I want to take it back for a minute. If you let me. I want to know most money like for you when you were growing up?

Zinnia Adams 3:08

So see, that's the thing. I can't tell you because it wasn't a conversation I ever had. It wasn't anything that was ever discussed, like, you know, now reflecting I can say that "Oh, my mom, you know, I know she bust her. But I know she did everything she could."

I am the third child of a single mother and my mom was 17 when she had me. So at 17 She had three children. So she didn't have time to talk about money. She was at work from sunup to sundown, which of course at that time, I didn't understand that was to make money, like so I did not have one conversation about money. Um, my dad, you know, when he was because originally he was in my life and he took me to the bank to open a bank account, you know, because that's what you did. You took your child to the bank, and we would go and deposit the money, but I never understood like why, like, you know, what is the bank, you know, and I ended up, you know, when we met him last touch, I forgot all about that account, and they ended up when I became an adult, they just subtract it from it, you know, because they started charging a fee when I turned it into an adult account and by the time I remembered about it, they had already closed it because they have subtracted all the funds from it. So it was like, I just didn't have any though that there was nothing about money. Honestly, when I was younger.

Acquania Escarne 4:28

I understood understood. So what changed? How did you suddenly become aware of your finances? Let's talk about that story. What was your aha moment?

Zinnia Adams 4:38

My first aha moment, honestly, is when I was 25. I was working at the Postal Service. But you know, I have my good good government. So you know, you think because you working you know, "oh, I made good money. You know, I could buy a house" and everybody's talking about, "oh, you know, you should buy a house. You know, it's the American dream." and so I went to a loan officer buy a house and he was like, yeah, no, no, not today. I didn't have any credit. I didn't have a budget, I didn't have maybe like money saved up.

Like, I didn't have a clue about any of that. Like, I thought I was just gonna waltz, you know, because at that time you went into to talk to your loan officer, it wasn't like now where you could do so much virtually. You went to their office and sat at their desk and talk to them and he's like, yes, "no, you need this. You need this, you need this." and that was my first moment to say like, "oh, well, what's, you know, what's credit?" I had credit cards before, but I had them and I had used them up and had not paid them back. Because, again, I didn't know anything about like, the way that I needed credit, you know? So that was my first moment that was like, oh.

Acquania Escarne 5:51

So, I just want to know, like, after that meeting, what did you do next?

Zinnia Adams 5:56

After I picked my face up off the ground, and dusted my shoulders off, and had to talk myself off the ledge. After that, you know, I took it as a challenge. You know, I'm a very ambitious and goal oriented person. So I want to my house, and uh mister loan officer, you're not gonna stop me from getting my house because this house is man. So I started getting books, because again, this was in 2008.

So Obama, just, you know, wom president, I had to get books, I had to go get physical books because ebooks weren't popular. There was no YouTube University, no Google. So I had to go get books and you know, I would talk to some co workers, and they would recommend books and I read, and I had to follow the instructions in the book to improve my credit score, and you know, pay off judgments and getting released and all of that, and I went through that whole process to improve my credit score, started saving money so that I can have some money saved up. So that I could go back to him like, look, see? I did it like, I did it. Like I did what you said, I did what you said, so that's what I did. It's like I use it as a, like a roadmap. You know, I essentially the tips and what he told me I needed I use it as a roadmap to work towards.

Acquania Escarne 7:19

And how long did it take before you could buy a home? Is this two year years?

Zinnia Adams 7:23

Yeah.

Acquania Escarne 7:24

So tell us what happened at 27? How did you buy and lose your home?

Zinnia Adams 7:30

Right, that's what that story is like, man, it went well, but how you just bought it. So bought the house, I closed on my home October 28 2010. So actually, the anniversary of that, just, you know, we just passed a few days ago and I was supposed to make a post but I forget. Um, I started getting my house, I was again working for the Postal Service, and I live in Chicago. So we get snow, ice, cold, winter, all of that and so on December 4, I injured myself at work, I injured myself at work, you know how it'll snow today and then it'll get really cold. So that's no becomes ice and then it'll snow again on top of that, so you don't know that it's ice under it. So I slipped and messed up my ankle. Slipped and messed up my ankle, I tried to work as long as I could, because I couldn't afford to be without an income. So because I had saved up enough money to purchase the house, but I didn't save money to have for after I had purchased the house.

So here I am six weeks later injured at work trying to avoid being off work and I just couldn't avoid it anymore. My ankle was going to give out so I ended up having to be off work for probably about two years total intermittently. So because I had to go through physical therapy, I had boots, cast, I was going to one doctor then I went to another doctor so they could actually do surgery.

So I ended up having surgery but you know that initial part when you first start worker's comp, it's not like you apply for it today and it comes tomorrow. It's the government so it's not it's not going super fast. Like we do stuff slow. So that time I had no money to pay my mortgage. I had just got this house it's literally six weeks after and now I have no money to pay my mortgage. I have to wait and I'm so embarrassed. You know because I just stuck my chest out like I got my house "oh, I bought my house." So now I come back and tell people that now I can't pay this mortgage that I got this house so it was a lot of me dealing with my own embarrassment and you know blaming myself and you know kicking yourself and all of that but I didn't really tell a lot of people what I was going through like if you read my book it says a lot of people gonna find this out when they read this book.

That's how I know that they really read it because it was just surrounded around that time that I didn't tell. So I suffered in silence. So that's how I lost the house at the same time, because my mortgage got behind when my workers comp finally kicked in the mortgage company was like, "look, we want all or nothing." You know, once your house get to that status, they're not accepting payments at that point, it's too late, you should have called them before that, and made some type of arrangement or made them aware. But I didn't know.

Acquania Escarne 10:25

Wow, so you made a couple of good points there. So I want to kind of dive into those, I always tell my clients when we're doing the same process of determining how much house they can afford, that it's really important that you don't make yourself house rich and cash poor.

Zinnia Adams 10:40

That's exactly what it was.

Acquania Escarne 10:41

That's what happened. You saved enough money for a down payment, but you didn't have enough money for emergencies and I always tell people, homeownership expensive. Even after you get the keys, you might have to fix something, you might have to get something, you know, especially if it wasn't a brand spanking new house, there's probably things that you wanted to add, there's probably things you wanted to do.

In addition to life happens, emergency, and medical situations come up and now you find yourself in this predicament where you did not have money to pay your new mortgage. You didn't have the knowledge to know, I should tell my lenders that I'm having an issue so they can work something out with me because another thing I like to tell people when it comes to creditors and lenders, is this just like your cousin, if you don't want to be chasing your cousin who owes you money, why you think they want to chase you? Right? So tell them upfront. I don't have it but this is my situation, what are my options, like at least know what your options are and try to see if you can comply with any of them. Right?

So that's the first thing. But the second thing is suffering and silence is so sad that sometimes we think this is the only way we can go about life because we're ashamed to tell people the truth, and maybe they can help us or in some cases, you feel bad because you're like they're struggling. So who am I to ask them to help me. But either way, I think we have to create safe spaces for real money conversations. I think that's the real issue. It's not a matter of what you think someone's capable or incapable of doing because I know some people who will tell you they they broke all day every day, but they got money in the bank. They just choose not to spend it because they don't want to spend it on certain things. But if you genuinely needed help, and they could help you they would right, but you never know because we don't talk about it. We don't tell our friends in our family when we need to help the most. So when did the family find out that you really needed help?

Zinnia Adams 12:50

Oh, well see, that's the thing I didn't have. I don't have a big, big family. So so that's what it really boils down to. I didn't have a big group and then I felt like the friends that I had you like you said, you feel like well, I don't want to be a burden on them. You know, I don't want to burden them, but like you said, you never know they might have information they possibly can help you. My close circle friends, they found out that this you know, at the time, in real time. So essentially, I kind of just made the decision that I was going to weigh it out and then I was going to save up my money so that I could go buy another property and I'll buy that property cash because somebody told me all that that's what they did and then they bought, I'm like, "okay, I'm gonna do that." But I didn't do that because my money skills weren't what they are now. So in theory, I said, "oh, yes, that's a great idea. I'm going to do that." But then actually putting it into action, then I did and at the time, I'm a single mother at the time myself because I had a child at 17. So I'm also navigating, you know, during my injury, going through my injury trying to you know, care for my child. So.

Acquania Escarne 14:04

So I do have a question for you as a single mom, I was raised by a single moms shout out to mommy, she's the best. She always, you know, she had times where she struggled. She was also an entrepreneur all my life. So some months were good in business. Some months were bad. But she never really liked let me know the numbers, right or the insight into what's really happening. But I could tell I'm not I was a smart kid and I figured out some things. Do you think your child knew what was going on or had a sense of what was going on?

Zinnia Adams 14:42

At that time? No, because at that time, this was 12 years ago, my daughter is 21 now, so at that time, she was pretty young. So for me to explain it to her at that point. She probably wouldn't, you know, capture foreclosure, you know what I mean? Like she can understand I don't have a lot of money. So she did it to her I did. Because remember, I wasn't paying a mortgage because they weren't accepting my payment. So we were good from her standpoint. I'm just being real, like.

Acquania Escarne 15:12

It's not funny. You're like, Oh, I got money, but we bout to lose our house. Oh man.

Zinnia Adams 15:20

I mean, it's the real is real life.

Acquania Escarne 15:22

So how did you bounce back from that? How did you? How were you able to really get over having a foreclosure on your credit to being a real estate investor tell me about that.

Zinnia Adams 15:34

What I did was I found bankruptcy. I moved from the house, obviously and I got an apartment and I got just a small apartment, like one bedroom gave my daughter the living room as her bedroom just as a way to save money. To have us, you know, smaller monthly overhead. So I did that file bankruptcy and I essentially started from scratch, I got secured credit cards, you know, started to work to build that good history back and build up my credit worthiness pretty much from scratch all over again.

Acquania Escarne 16:11

How many years did it take? Whoo,

Zinnia Adams 16:13

Whoo, the years that it took, so that was 2000. I'm gonna say 2000, maybe third 12 or 13? Wait, hold on my daughter graduate 2009. So yeah, that's probably 13 or 14 is when I moved into the apartment. So to actually say that I repaired it. I'm going to say, maybe I'm gonna say two or three years, but actually changed how I use money and the way that I use money, I'm gonna say that it took about five years.

Acquania Escarne 16:49

Okay, so tell us what types of changes in your financial habits or even the decision to become a certified educational instructor like, what did you do to get to that point, what types of habits did you have to change first. So definitely, bankruptcy requires you to start over. So you got to secure credit cards, and you basically got a credit card that allows you to put money on it first, correct, spend it, put more money on the spending, put more money on it.

So for those who don't know, secure credit cards are prepaid in the sense because you're trying to establish trust with a bank. So in order to establish that trust, they give you a card, that's plastic, but they also tell you, you have to front the money to cover your purchases and then as you spend the money, you can replace it, and so so forth, until eventually, that shows up as good credit history and then from secured credit cards, you can transition later to unsecured credit cards, which are the credit cards you have where you're not pre paying, but you have a credit limit, and you're able to spend up to that credit limit, and then you're hopefully paying off your balances in full. So what other things did you do to kind of change your habits?

Zinnia Adams 18:06

So like I say, I got two secured credit cards, and I managed those and I kept my the amount of money I used under 20%. So the whole time while I did that I worked to build up money, so that I will have an extra savings and I wouldn't have to be in this predicament again and I started to learn about money. So I have some people love this book. some people hate it, but I read Rich Dad Poor Dad.

But one of the big changes I made about money is the way that I use it instead of using money like seeing it as I'm gonna say a thing like, oh, okay, I just, you know, this is just something I used to buy what I want, I changed the way that I use it, that it can be a tool. I changed the way that I think about when I make purchases, instead of purchasing things, I start to think more about experiences because as we just saw, I had to downsize from a house to an apartment.

So obviously, I had to get rid of a whole bunch of things that I had just purchased and now I have to try to sell them or you know, do something with them. So, and my daughter is transitioning from elementary school to high school. So her expenses, you know, and activities are increasing. So I had to think more about what's the best way for me to use my money that I have on hand. I started to work actually learning about my retirement account, actually using more money to invest in it at this point. I worked for the federal government at that point. I had been with the federal government probably seven, eight years while I was investing in my retirement account. I wasn't an active participant in it.

So I didn't actually go in and direct where the money was going. I just put it in there and left it there. So I started researching and again reading and learning how do you manage that money in there so I can help it grow. So just really becoming a better steward and taking control over my finances and the direction that I wanted them to go and I became a resource for my friends like they like, okay, she pulled herself out the mud, she bought a house, not how she still turn around and get, you know, more investments than I do.

They're like, You got to tell us, you know, you had to tell us how did you do this? What did you do? Okay. And then I just became like, the resource, okay, this will be doing, what do you think like and that just let me know, because you think that you're struggling alone, but you realize a lot of people we did and our families were struggling trying to survive. So they might not have had time to really teach us about money. They were just trying to keep food on the table, keep a roof over our head, make sure we were alive and enjoying our childhood. So maybe they didn't have time to teach us about money, you know. So I was I figured I wasn't alone. That's what made me say. "Okay, I need to start something where I help other people learn this."

Acquania Escarne 20:53

Yeah, that's really good and I can really relate to that story, because that's kind of how I just dropped into financial coaching is everyone kept asking me money questions, because they saw that I had an interest in the topic and I was reading, Rich Dad, Poor Dad and other books and then it became like, "oh, you should take this publicly, you know, you should be on social media." So it's was that the next step for you is, "hey, everyone's asking me questions. Let me get certified. Let me level up."

Zinnia Adams 21:24

So not yet. Because like they say, on the airplane, you have to put your mask on your own mask on first. So I finished leveling myself up financially, I went and completed my masters, and was able to get into a career from a job that I was in at the time and once I graduated with my master's and 2017, and I was finished with school, then I started my business in 2017.

Acquania Escarne 21:49

Excellent. I love that. So are you currently a full time entrepreneur?

Zinnia Adams 21:54

No, I actually still work with my nine to five as it's a part of my plan and I am an entrepreneur also.

Acquania Escarne 22:02

So I love it. I love it. I can relate to that also. So tell me a little bit more about your real estate investing career? What is it that you like to invest in? And how did you get started.

Zinnia Adams 22:16

So as I said, I'm a nine to fiver and a business owner. So I don't really have as much time to be very active in my real estate. So I buy and hold is my which basically means I'm a landlord. So when I buy real estate, I hold on to it. Um, so that's what I prefer and then I get a property manager.

So I essentially want to buy real estate and have it as more of a passive investment so that I can just I, you know, I do the initial funding, you know, get it tenant ready, if there's a repair, things like that. But essentially, I don't hear about the property for the most part, my property manager manages it, I just get a report every month. That's what I prefer. I don't think my emotions are good for flipping. I don't I don't, I don't know if I'm ready for that. I'm trying to work my way to get to maybe like an actual rehab because I it move and ready. So that's the next part I want to get to like well bio rehab or maybe a fixer upper. But flip. I don't know if I have the I don't know if I could that.

Acquania Escarne 23:18

It's not for everybody. That's what I say. And sometimes it's stressful. And it's just a lot of moving parts and buy and hold is an excellent strategy. It's a great way to build up doors slowly, sometimes that but also help you to establish some steady passive income because if you are renting to longer term tenants, then you have an idea of what income is going to come from that property in a year and you can really plan your now strategy or your exit strategy based on that revenue a lot easier than a possible returns from a flip that you once you sell it it's gone. Right? So you're not going to keep making income. So that's that's pretty dope. So where are you at currently investing? Is it still in Chicago? Are you going outside of states where you live?

Zinnia Adams 24:06

So I actually didn't purchase in Chicago because the market was funny. A lot of the houses you know that a lot of people were paying well over asking price in 220 when I purchased my first investment property and so I actually purchased in a suburb that's like three hours from Chicago. The market was nice. I literally drove down there viewed like 20 properties based from. I searched online, and I liked it. So then I decided to invest there. I'm kind of playing Hokey Pokey with my finances. I pay off debt. I acquire a property, I pay off more debt, I acquire property as a part of like you said my exit plan.

Acquania Escarne 24:45

I like that and I think that's a smart move. So do you have a team? Do you have a realtor you like to work with or are you always just searching online yourself? Is their property manager the same for all your properties or do you pick based on the area?

Zinnia Adams 25:00

Right? So it depends on the area that I'm purchasing in. So it depends on what type of property. So if it's the suburb far away, then yes, I use the same property manager there. She's my realtor and property manager. But I'm actually gearing up to purchase a multi unit now in Chicago. So I do have a broker that I work with. Realtor that I work with regularly, especially now that I teach people how to prepare their finances for homeownership, of course, now I have a plethora of new real estate friends. But from my multi unit, same thing, I don't have a property manager yet. I'm hoping to find one before I purchased it. I don't want to manage it. Um, but I have not gotten like a lot of great referrals for property managers in Chicago.

Hmm, okay, if anyone's right, it's a market for it. Yeah. So keep that in mind. How many units? Does the multifamily have?

No, I'm going to purchase it. Okay. Three unit? Three unit.

Acquania Escarne 26:01

Nice. Nice. Do you have you ever house hacked? Have you ever lived in any other properties?

Zinnia Adams 26:06

You know, I haven't. So that's the other part that makes my story interesting. Where I live right now, I currently rent because I don't own in Chicago. But I live in Chicago. So that's another thing that I tell people personal finance is personal. So you have to do things based on your financial goals. When I buy the three unit, then I will live in that because it will be here in Chicago.

Acquania Escarne 26:29

I like that. So future house hacker, my husband and I house hacks for most of the beginning of our marriage, and we enjoyed the company, but also the rent. If you want to know more about that, listen to my story about House Hacking. I'll made sure to include a link in the show notes. But yeah, so that's actually you're a kind of opposite of me. I learned after investing in Philadelphia, and I live in Virginia. So that was an out of state property for me. I did that for two years and I was like, you know what, I don't like toilets and tenants and so I decided I didn't necessarily want to be a landlord or primarily a landlord.

So now I do mostly commercial real estate and I have one rental left. But I definitely know the value of buy and hold because the property we have that has no issues that we're holding on to is a no issue toilet and tenent kind of situation and I can deal with it.

Zinnia Adams 27:25

I actually want to get into commercial.

Acquania Escarne 27:31

Yeah, yeah, it's a great space is passive. You literally, you know, I collectively deal with other investors. So I'm not even taking on all of our responsibility. So it's just quite nice. And then you get to split the revenue. So what's next for you? Where's Perspectives going in 2023?

Zinnia Adams 27:52

Perspectives is going to partner with more organizations, then partner with more organizations and meeting with different like nonprofits, to possibly like my coaching will be done like under contract. So I'll be working to come out with masterclasses as far as what I will offer to my customers and I'm just looking to broaden my impact and be able to reach more people and just looking to network and partner with others that I can do that to be.

Acquania Escarne 28:21

I love that. Very good. So keep us posted on what you do and how you doing it. My last question for you as a signature question, because the name of the podcast is called The Purpose of Money. I asked all my guests this question, what is your purpose for money?

Zinnia Adams 28:37

My purpose for money is to use it as a tool. That's what my purpose for it is. I have where I want to go and it's just one of the tools in my toolbox to help me get there.

Acquania Escarne 28:49

Okay, I like it. I like it sis, and I'm sorry, this is another one I just thought of because I do remember you're also a mom. So how is your 21 year old daughter doing with money?

Zinnia Adams 29:01

Oh, she's not doing well. I started teaching her and I'm very passionate about personal finance. Like, literally my friends credit scores have increased just by being my friend. But you know how your child is. Your child sometimes is rebellious and they're like, You want me learn about money? Well, I refuse. But now that she's 21 she's like, ooh, can you please teach me about money? What okay, you said, Wait, when I was you said I could do what's right. Like, that's where she's at now, because she's really, you know, experiencing more life. And she's realizing like, oh, man, she was trying to help me and now she's there. So, you know, we're kind of, you know, working through it so she can get it and understand it, but I still appreciate that she's only 21 and learning it so Okay.

Acquania Escarne 29:51

That's good. Does she pursue higher education?

Zinnia Adams 29:54

Yes

Acquania Escarne 29:55

Did she had to take on loans or work while she was a student. '

Zinnia Adams 29:58

That's the one thing she did. Listen to she's not going to take out any loans, okay? She's financing her way what we're financing through her undergrad and then the goal is for her to give them get like scholarships or, you know, funded through some other way if she pursues a higher education.

Acquania Escarne 30:16

I love it. I love it and so keep it up. Nia, this is awesome. I'm so glad to have you on the purpose of money podcast and sharing your story. Before we you leave, please tell my listeners how can they find you? Where did they follow you and what is your website if you have one?

Zinnia Adams 30:34

My website is www.perspectiveschange.com. You can find me on Instagram and Facebook @moneyperspectives. Tick tock and YouTube @niasperspectives. So everything is perspectives like honestly because that's my goal to change money perspectives through financial education.

Acquania Escarne 30:57

I love it guys. Make sure to check her out on all her platforms.

I'll also include everything in the show notes. Also, don't forget to catch her get a copy of her book Life is Short Buy the House and if you have any questions or want to continue to hang out with Nia, make sure you connect with her on social. Until next time, guys keep building generational wealth.

Thank you for listening to the purpose of money podcast. For more resources and information check out my website thepurposeofmoney.com and while you're there, please sign up for our newsletter so you have the latest information on new episodes and blog posts. Until next time, keep creating freedom in your life today.

Transcribed by https://otter.ai