If you want to build a successful real estate investing business, understanding your numbers is non-negotiable. In this episode, I sit down with Cheryl Heller, a seasoned real estate investor and fractional CFO, to discuss the biggest financial mistakes investors make and how to avoid them. Cheryl shares her journey from corporate finance to real estate investing, the lessons she learned from deals that didn’t work out, and how she turned things around by treating real estate like a true business. We dive into short-term rentals, mid-term rentals, syndications, and the key systems every investor should have in place to stay profitable. If you’ve ever wondered how to structure your finances for long-term success, this conversation is a must-listen.
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Hello, my real estate investor listeners, and welcome to another episode. Today, I have with me my friend, real estate investor and fractional CFO, Cheryl Heller. Cheryl, thank you so much for joining me today.
Adrienne, I’m so excited to be here and talk to you about all things real estate investing.
I know Cheryl will share so much experience and wisdom with you since she works with investors and is also an investor herself. If you get value out of this, make sure to like the video, subscribe wherever you’re listening—YouTube, Spotify, Apple Podcasts—and drop a comment with what you found helpful or any questions for Cheryl or me. We’ll be monitoring the comments and will get you an answer.
For those of you tuning in, I know Cheryl through our women’s mastermind, GoBundance Women. Cheryl joined a while back, and we connected over calls about real estate investing, specifically short-term and mid-term rentals. Cheryl is a wealth of information about real estate investing, particularly on the financial side. I’m excited for her to share her story and insights with us today. Cheryl, I’d love for you to tell our listeners about your background and how you got to where you are today.
Yeah, so by education, I have an accounting degree, and I went into public accounting, as many accountants do. Eventually, I transitioned into a corporate environment, spending about 20 years doing finance, operations, culture building, and transformational project management. I tried to do some real estate investing on the side, but it wasn’t working out the way I wanted it to. When I left my corporate job about seven years ago, I took a break and really dove into real estate investing. I got my real estate license—not something I actively use, but it was a great learning process. Alongside that, former colleagues and friends started reaching out, asking for financial guidance for their startups and businesses. That led me to providing fractional CFO and strategic advisory services to startups and small businesses over the past seven years. I love working with founders, understanding their goals, and putting together a plan to get them there.
You make it sound so easy, but I know so much went into your journey. I’d love for us to dive into that. You mentioned earlier that your first real estate investments didn’t work out. So often, people gloss over their failures, but we earn our stripes through those experiences. What changed? What did you realize in hindsight about why those first investments didn’t work? What’s different now that you’re succeeding in real estate investing?
The first few investments I made were based on advice from others rather than my own due diligence. I had a friend, a real estate agent, tell me about a condo for sale, saying it would be a great rental. It was always rented, with minimal vacancy, but it was just breaking even. After a few years, we sold it and broke even—no profit, no loss—but that’s not why people get into real estate investing. A similar thing happened with another property. Some years we made money, some years we didn’t. When I analyzed our returns over the years, we basically matched the stock market, but with a lot more effort involved.
The biggest change happened when I started doing my own underwriting. I stopped thinking of real estate as simply buying a property and hoping it appreciates. Instead, I treated it like a business—analyzing deals, using financial tools, and trusting but verifying expert advice. Now, we still work with great property managers and real estate agents, but we do our own research, run our own numbers, and aren’t afraid to walk away from deals that don’t meet our criteria.
That is such an important shift. I think a lot of investors fail because they rely too heavily on others without verifying the numbers. Then, they don’t track their finances properly, and suddenly tax season rolls around, and they realize they weren’t actually profitable. So now that you’re underwriting your own deals, what do your investments look like? Where are you investing, and what strategies do you use?
We primarily focus on short-term and mid-term rentals. We love drive-to vacation markets, investing in places like the Outer Banks in North Carolina and Charleston, South Carolina. The Outer Banks has been built on short-term rentals for decades, long before Airbnb. We started investing there because we vacationed there and loved it. We also have properties in Charleston and Atlanta.
For short-term rentals, we work with property managers. They’re strong cash flow properties, and we enjoy visiting them. However, as property prices have increased, deals in those areas aren’t cash flowing as well anymore, so we’re pausing new acquisitions there. A year ago, we got into mid-term rentals and bought a property north of Atlanta. That one caters to people displaced from their homes due to repairs or relocations. Guests stay anywhere from five weeks to several months. Since turnover is lower, we self-manage it.
We also invest in syndications, including new developments like an apartment/retail building in D.C. and a cul-de-sac of beachfront homes in Carolina Beach. While we still believe in syndications, we’ve found that our own investments tend to outperform them, and construction delays have impacted the returns.
That makes total sense, and I’ve had similar experiences. There’s no replacement for owning and managing your own properties. I’d love for you to share some wisdom for new investors. What are the most common mistakes you see?
One big mistake is not treating real estate investing like a business. We meet regularly to review our goals, track performance, and plan improvements. We also separate personal and business finances, maintaining a dedicated real estate bank account. We review financials monthly and question any unexpected expenses. A few hundred dollars here and there adds up over time.
Another mistake is not understanding financial reporting. Your tax return and cash flow statement are not the same thing. Depreciation lowers your taxable income but isn’t an actual cash expense. Meanwhile, principal mortgage payments don’t appear on your tax return but impact your cash flow. Keeping these separate and reviewing financials consistently helps prevent surprises.
That’s fantastic advice. Cheryl, this has been such a valuable conversation. If listeners want to connect with you, where can they find you?
I have a free resource: 30 Financial Terms Every Real Estate Investor Needs to Know. You can download it at www.30terms.com.
Amazing! Thank you so much, Cheryl, for sharing your insights and expertise. And to my listeners, if you found this helpful, make sure to like, subscribe, and drop a comment below!