Jeanne & Chip Allen

“I'm originally from Missouri, born and raised in the southwest corner, in the Joplin area. I went to college at the University of Missouri and two days after I graduated, my best friend and I drove out to California. We took jobs in the Bay Area that we had already interviewed for and been offered.”

Interviewed by Jonathan Rozek for Ten Paths. David Lindahl was not involved in editing these interviews.

Jeanne: I'm originally from Missouri, born and raised in the southwest corner, in the Joplin area. I went to college at the University of Missouri and two days after I graduated, my best friend and I drove out to California. We took jobs in the Bay Area that we had already interviewed for and been offered.

I probably would still be a Midwesterner if it weren't for the most influential person in my life, my sister, who persuaded me to move in with her and her husband, and try out California. I decided to give California two years, and 40 plus years later, I’m still here. Chip and I now live in Sonoma, in the Wine Country, a little north of San Francisco.

I started out in Oakland. After majoring in fashion merchandising, I began my career as a retail buyer—a department store buyer. I did that for a few years, working for a small regional department store, then went to a large chain, Mervyn's Department Store.

From there I went to Ross Stores, and eventually moved to Levi Strauss. I jumped the fence from the retail side to the manufacturing/marketing side. At Levi's, I managed production and inventory planning for the women's jeans division for the U.S.

So I have a big numbers background and did a lot of traveling during that period as well, including many trips to Asia. I always enjoyed my job but I was never in love with my job. I say that because now that I'm in real estate, I'm finally in love with my job.

I retired from Levi's and in retirement, I wanted to figure out what to do.

Jon: What was your backstory, Chip?

Chip: I grew up in San Francisco. If you've been to San Francisco, there's the western side of the city called the Sunset District, and that’s odd, because it is always foggy. As a young man, my dream was to fly. I was fortunate to attend and graduate from the US Naval Academy at Annapolis, Maryland. As luck would have it, I got to meet Admiral Rickover and instead of going on to a career of flying, I was selected to serve in nuclear submarines. Instead of “flying in the wild blue yonder”, I “ran silent in the deep blue ocean”.

Jon: Is it true what I heard about Rickover that each midshipman must interview with him, and he has them sit in a highly polished seat with the front legs cut off shorter, so they’re continually sliding down?

Chip: That is true. What’s also true is I got thrown out of his office not once but twice. In the end he was swearing at me.

Jon: You’re in good company. He did the same to Jimmy Carter.

Chip: At first I thought I’d get to fly after all, because this guy won’t want me in his submarine service. But it turns out that he just liked to put people under stress as a testing mechanism. Fortunately, after four years at the Naval Academy, your skin gets fairly tough and you don't let it bother you when even the Father of the Nuclear Navy yells at you like that.

I spent five years in submarine duty. It was a great experience, but long term it wasn't for me. So I left the Navy and went to law school.

I then practiced law for almost 40 years. I specialized first in doing real estate construction litigation, and in the last 20 years I did estate and business planning for people. Like Jeanne, I've always loved real estate.

When we retired—really more like changing careers—we thought about different directions we might pursue. We weren’t into things like golf, but we do love to travel, we love architecture, and we love real estate. So we were on the lookout for a way to combine those interests.

We have some dear friends who had been introduced to a group that did single-family investing, basically the fix-and-flip type of business. They invited us to come to one of those introductory types of sessions.

We went with them and thought this was something we would enjoy. We were excited at the idea of fixing and flipping, and took a bunch of their training.

What we soon realized was the area where we live is very expensive, and not really conducive to doing that type of investing. However, this is where we were introduced to multifamily. They had a six-day course on commercial real estate, and that appealed to us as a way to scale our real estate business faster than doing fix-and-flip one-offs.

Jeanne: Going back to our day jobs for a moment—we were just kind of following the path. You go to college, get your degree, find a job, and climb the ladder. Chip was an attorney and I was in fashion merchandising. We were only spectators of real estate.

We’ve recently discussed between ourselves that we both had real estate in the back of our minds for many years in a passive sort of way. I can remember when we lived in Oakland, we would drive by a particular house that Joe, one of Chip’s friends, lived in. It was a big, fancy house because Joe was a real estate developer. We figured, well, good for Joe; he really is connected and knows how to do that stuff. That's not us. We need to stay in our lane. We should stick to practicing law and to retail, because that's who we are, what we were trained to do, and what we know. That wealth mindset was for someone else.

Chip: Jeanne is so right. For a few years I acted as outside counsel to a property-management company. They did primarily Section 8 subsidized-housing work, and we would create partnerships for very wealthy people who needed huge tax credits.

I saw the kind of fees and profits these deals generated, but I always thought of myself as just the lawyer. My role was to take care of the paperwork, and someone else’s role was to get all that upside.

As luck would have it, on one of these deals, I was paid not in cash for my services, but in shares of a self-storage facility. I got five percent of the deal in 1986.

Jeanne: After we got married, once a year these checks would show up in our mailbox. The first year one showed up and I opened it, not knowing what it was. Here, out of nowhere, someone sent Chip a check for around $10,000—and remember, this was 30 years ago, so ten grand was worth even more.

Here’s the even-better part: each year, Chip would get a check like that! The fact that Chip did the work once and was getting paid year after year made a big impression on us. However, early on we still had that idea of just doing our professional jobs and not going out and creating passive income streams for ourselves. But it didn’t hurt to have this reminder arrive in the mail, year after year.

Jon: You think about the professions that have the most prestige in our society and they include things like being a brain surgeon or attorney. But the thing is, even highly respected brain surgeons are doing piece work, just like a garment maker is doing piece work. The surgeon is paid better, but in both cases, if you don’t show up to work today, you don’t get paid.

We even have it in our language about “hard-earned money.” Money must take a ton of effort to make. But the people who say that don’t know about passive income, where you indeed work hard, but you do it once, and you then enjoy getting paid again and again.

Jeanne: That's sure how we were taught, wasn't it?

Chip: “You say you want that ice cream cone? Go mow the lawn.”

So back to our real estate journey: we took that six-day commercial real estate academy with the fix-and-flip group and liked it. The really interesting part of going to these types of learning events is the networking with other students and the trainers between activities. It’s just as important as the things you learn. At first we didn’t realize how important networking really was.

Jeanne: That company had a tremendous coaching program, but it was focused completely around single-family fix-and-flips. So we kept trying to fit a square peg into a round hole; we tried to adapt what we learned about single-family to multifamily. Finally we decided to just dig deeper and see what else we could find about multi-family training.

We came across another real estate expert who lives in the Bay Area, so we went to meet him a few times, and took his online boot camp. Again, good reinforcement, good deeper understanding of multifamily, but he didn’t have any coaching/mentoring.

We knew the coaching was the piece that we were missing, because we knew how valuable coaching was when we were doing the single-family properties. That’s what led us to RE Mentor.

By this time, we had met another couple through networking at events, and they live about an hour away from us. Mike and Kristy had been introduced to RE Mentor, and had gone to their Multi-Family Millions event a year or two earlier. Through them we became familiar with RE Mentor, and ended up going with them, because it seemed like most of the other experts in the multi-family world got their training at RE Mentor. So it's like, if it's good enough for all those people that went on to become huge successes, why don't we just go with RE Mentor?

We did that a year ago and just finished our coaching program with Jeannie Orlowski a couple of months ago. It has truly delivered what we hoped it would deliver, which is getting us exposure to the right people. The coaching was one thing, and that was very valuable, but it was really RE Mentor that got us the exposure to other people in multifamily. What has made the difference is understanding that this is truly a team sport. Partnering with other groups and getting sponsors for our first deal has been huge for us.

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