F1A 2 Jennifer I. Grimson | Filing Bankruptcy

Who would have thought that filing bankruptcy – twice – can serve as a springboard to a better life? This is exactly what Jennifer I. Grimson did. As a single mother who lost everything twice because of divorce, she managed to find success in real estate the second time around, rebuilding everything that she has lost. Sitting down with Vera McCoy, Esq., Jennifer looks back on how she used short-term rentals to build her own small empire and creating over $1.4 million in income, producing investments with nothing more than a W2 and grit. She also shares her amazing work at Micro Empires, where she helps fellow real estate people pull back the curtain on the path to financial independence and unveil the most valuable investing secrets. 

Listen to the podcast here:

Building Back From Bankruptcy With Micro Empires

I’m excited that you decided to join me for what I know will become a great resource for new and seasoned entrepreneurs, want to be entrepreneurs, and even some 9 to 5ers. Whether you’re an entrepreneur, an investor, or an individual who has an idea that you want to transform into a business, Financial 1st-Aid is here to help you move in the right direction from idea to development to implementation.  

I have the honor of having Jennifer Grimson. I’m excited because she’s a woman after my own heart. She’s a real estate investor, a podcaster, an artist, creator of Micro Empires and most importantly, a mom. That is the toughest job, I know because I’m one. Jennifer is a woman that has filed for bankruptcy twice. However, she did not let that stop her from developing financial freedom for herself and her family. How are you, Jennifer? 

I’m great. What a great intro. Thank you so much. 

You’re welcome. You’re a fantastic guest to have on my show because my show is directed towards people like you. Please tell the audience about your background. 

My background, professionally is that I was somebody who is in healthcare technology sales for the majority of my career, which was 25 years. In and out of sales at every level, anything that you could imagine. I’m a mother of two. I divorced when my children were 1 and 3. I had sole custody. We moved across the country. I’m truly a single mother. I didn’t get every other weekend off, but that was okay. My financial mistakes in my financial stories are relational. My mistakes were not about buying expensive things or overspending too much at Christmas. It was about turning my wellbeing over to someone else and living in financial chaos, and having to learn those lessons hard.

That’s what I did. That’s what my show is about, Micro Empires, and the story that I tell. More importantly, I shared it because my story is not unique, but I do think it is kept a secret. I kept it a secret for many years. I got tired of it. I decided I’m going to tell people, especially because from the outside looking in, I looked like I had it all together and it was all going well. That’s part of our issue as a culture, that we maintain the facade when it’s not necessary or it shouldn’t be. 

What happened to cause you to file bankruptcy the first time? 

Divorce is ugly, you may have heard. 

F1A 2 Jennifer I. Grimson | Filing Bankruptcy

Filing Bankruptcy: Sales is one of the few jobs where gender doesn’t matter.

 

Unfortunately, I did that at the beginning of my legal career. 

Some are uglier than others. I was going through a divorce in the state of California. To encapsulate it and make it pretty short, my ex-husband sued me 25 times in ten years. I amassed over $500,000 in attorney’s fees. He sued not only me, he sued my mom, brother, and sister. He sued everybody and anybody that he could. It all took place in California and I was forced to go back to court every single time. I was living at the time in New England, Boston. I was flying across the country to California several times a year to deal with court issues because we didn’t have Zoom. We didn’t have any of this stuff available.  

The first time I filed bankruptcy, I had been granted a divorce, given custody, moved to New England, was working, and had bought a piece of land and was building a house. He continued to sue me. At that point, he had also sued those family members I mentioned. It dawned on me that if I didn’t have any money, that that might protect me. Chapter 13 Bankruptcy at the time protected my primary home. I think the rules have changed now. I finished building the house, I moved in and the next day, I filed Chapter 13 Bankruptcy, which strategically stopped all of the lawsuits even against my family, although he did continue those afterward.  

For me, it stopped them dead for a solid year. It protected my asset. What it did was ruined my credit for ten years, which was fun. That is what happened. It was the best solution because it took away all of the power. Fortunately, I had a good job and was making good money. I was in a home that I could afford. The next step was learning to survive on cash because your credit cards go away, everything goes away.  

That was a great solution to your problem. Because after having built a home, who would want somebody to take that from you? Especially if you had two young children at the time. What was the determining factor that made you know that bankruptcy was the best solution for you? Did you consult with an attorney or an accountant? Did you just do your research and say, “I can stop this crazy person from suing me from all these lawsuits,” and then decide to do it? How did that transpire? 

Like most people, I did my own research. This was 2002. I called a bankruptcy attorney and got them on the phone. I told them all of my brilliant assessment of bankruptcy. They said to me, “Where did you get all this nonsense from?” I advise anybody to speak to a knowledgeable attorney. I know that you are an attorney, specifically, there are different kinds of bankruptcy that are used as tools. The only way to know what’s best for you is to go. I didn’t know what Chapter 13 was. I didn’t understand how it was structured and that has changed since 2002. Fortunately, it was a great vehicle for me to be able to keep the house, protect myself, protect my family for a period of time, and get that monkey off my back. It creates other problems, but I welcomed those. Those were easy compared to what I was dealing with. 

At the time when you filed or the attorneys filed for you, how did you feel about that? Were you scared? Did you feel relieved?  

Growing up in a culture of money where you never spend more than what you have, you never put anything on a credit card, people who carry debt are bad people. I had a ton of shame. I was ashamed and afraid. Especially because in my marriage, I had lived in financial chaos. What I had worked so hard for was to have the stability, to have a good income. It’s not about money. I wasn’t independently wealthy, but I was able to pay the bills and have some breathing space. I felt tremendous shame, embarrassment, and I felt like a failure. At the same time, I felt tremendous relief because it did stop the lawsuits. It gave me and my family the time we needed to breathe. Although he did continue those lawsuits against my family as well. 

As a culture, we maintain a certain facade when it's really not necessary or shouldn't be. Click To Tweet

He sounds like he was a little nutcase. It’s all different for people in their marital situations but sometimes, it seems like the person that goes off the rails has control issues. It sounds like he had a real control issue. That forced you into filing bankruptcy whether you wanted to or not. It’s a good thing you do. What happened the second time that made you decide to file? 

I had gone to California. At this point, I was completely out of money and represented myself with pro se into the court system and cut a deal with my ex-husband that he would be paid an amount that I borrowed from my family because he just wanted to punish me financially. I paid an amount and that he could never sue me again, which was hard to get. I spent probably three days sitting in a courtroom with his team of lawyers, no less than four lawyers on his side, writing up a document that was ironclad, that he could never sue me again. 

What was the basis of his lawsuits? 

He was very angry that I had won custody. We had gone through a psychological evaluation through the California court system. I had been deemed the parent and given custody of the children, and he never got over that. It was mostly that and disputes over child support. All of which I pretty much walked away from. I got that agreement and part of our agreement was that we would agree to what’s called in California a special master. It’s basically a psychologist oversees the children and the visitation, etc.  

I didn’t realize that the person that my ex-husband suggested was a father’s rights activist. Up until then, my experience with psychologists or whatever the title is, is that they’re fairly reasonable. The most reasonable people would look at this and go, “She’s a good mom. He’s a dad who may not have a lot of custody, but he loves his children,” which I always thought he loved them, and there would be a rational response. Right away, it became clear that that wasn’t true. Before meeting me, this special master said he wanted to try to move custody to my ex-husband, so then the battle began.  

I ended up in a battle with this person who I then learned that my ex-husband was paying his attorney’s fees, the special master’s attorney’s fees. Ultimately, he lost his license. That took years. Long story short, I was at this point living in New Hampshire. Now, everything was on my side. This person had to fly to New Hampshire. They were pursuing me because they had been told that I had these great buckets of wealth buried in my basement. 

What I realized a few years into this was, “I could just file bankruptcy again.” The truth is you could file it every three years. There are parameters and other things. I was like, “I’m going to file bankruptcy again.” I call it getting turned up, “There’s no money here. You can bang all you want on the door, there’s no money here.” I did that. I was in a position in my life where the relationship that I was in, my boyfriend at the time had wanted us to move in, and we did. I was in a high-pressure, high-level job. He wanted me to take some time off from that so I did. I was selling the house and I thought, I could do this again. I don’t need that much money to get through.  

I did it again. It was a strategic move. I didn’t feel great about it. I hadn’t even finished the first ten years. I was still in the throes of what the first bankruptcy had done. I did that and it did work because I just made it clear, “You can sue me all you want, and I can do this every three years.” At this point, what does it matter? What do I have to be afraid of? Losing all my credit and not having any money? Please, I have already done that twice. I was not scared. 

F1A 2 Jennifer I. Grimson | Filing Bankruptcy

Filing Bankruptcy: In order for an empire to maintain its stability, it must learn how to pivot.

 

What motivated you to begin your journey of entrepreneurship? What was that thing that you said, “I don’t have to work this high-pressure 9:00 to 5:00 sales job. I’ve already been through bankruptcy twice?” What’s that thing that said to you, “Let me try doing something different?”  

That relationship that I was in, I was in for a long period of time. What I had done was I had gone from the frying pan into the fire. I had turned my entire emotional financial wellbeing over to someone else. When that relationship ended, I found myself again with no car, no job, no place to live, completely flat broke, and without a job. I did go back into sales because sales is a great job. It’s one of the few jobs where it doesn’t matter what your gender is, you can make a lot of money. I had also been fired from jobs. Your whole life could be upended and that can happen at any point. I knew that I was going to keep my job, but I had to build other things that were going to help me have stability. For me, the beginning was real estate. 

What kept you motivated to pursue real estate investing once you started considering all the stuff that was going on around you? Some people would look at your two bankruptcies and say, “She’s a big failure.” As you said, the shame of it all and the embarrassment of it, what was the thing that kept you going? 

This is a skill. Maybe it’s from being in sales, or maybe being the youngest of six. When people tell me no, it makes me go even harder. I almost feel like, “Thanks for telling me no because now I’m definitely going to prove you wrong.” There is some of that, I call it acting as if. It’s not fake it until you make it, but telling yourself, “There’s no reason that I can’t be as successful. I can’t learn something that someone else is doing. There is nothing on this planet that I can’t learn if I put my mind to it.” One of the key factors was finding my tribe.  

For me in Nashville, that meant finding a group called the Real Estate Investors of Nashville. I owe a huge debt of gratitude to that group because this is a large group of mostly men, but for the first time, people were speaking a language that excited me. At first, I didn’t understand it, it would be like walking into a room of lawyers and having you all use legal terms and having no idea what it meant, but I was excited because I knew I could get there. I saw people of all colors, all walks of life, young, old, whatever, doing different kinds of real estate. I was realizing, “I just need to take the time and understand where I can make a move in this.”  

I will say you need to be swimming in the right pool. Once you know you’re swimming in the right pool, at least you’re in the right pool, and you can go from there. You could figure it out from there. That was motivating because it’s a totally different mind shift. I still had my day job but I was surrounded by these people who were doing it. Some of them started with absolutely nothing. I felt that if I continue to surround myself with folks like that, continue to understand, continue to understand myself and what I was comfortable with, I would eventually find a way to create another stream of income.  

When you started your real estate investing gig, were you still working your full-time job? 

Yes, I worked my full-time job until November 28th of 2018.  

You don't have to solve the problem all at once. Click To Tweet

Did you find that having that full-time job gave you a level of comfort in knowing that you had that income coming in, but you were also pursuing something that you could do without being employed? 

Yes. First of all, I always had to have a job because I had to provide insurance for my children. That was something that was ordered by the court, that my ex-husband would provide insurance, but he never did. For anybody out there who’s been through a divorce, you can spend a whole bunch of money in court or you can just do it yourself. I had to keep the children and myself insured. That was a big portion of it. That’s a big portion of the American dilemma as well. Having a full-time job did a couple of things. It gave me vehicles that I didn’t know how to use yet. I didn’t realize that I could borrow against my 401(k) without taxes or penalty. I borrowed against my 401(k) and I paid off my car. I borrowed again, and I bought a house. I borrowed again, and I bought another house because I bought those houses with 3% down, which I also didn’t know I could do. 

You did that by using your 401(k). 

In some of these houses, I was borrowing $17,000 and buying a house. You don’t have to have 20% down if you’re willing to move, which is what I did. I learned about using my HSA, having the flexibility to invest with that as well, some of these tax strategies that I hadn’t known before. That was key, and loading up the 401(k). For example, I left a company and I ultimately converted that 401(k) into a vehicle that allowed me to buy a property. That’s another vehicle that I had no idea about until I joined this real estate investor group. 

They just tagged them for REIAs. There is a national organization, a national REIA. The one that you were involved in probably was tied into that because I’m a member of one in this area where I live as well. You’re right, they do provide a lot of great information, things that I know that I wouldn’t have known had it not been for that group. You have this rule that you have called the 10, 10, 10 rule. Can you explain that to our readers? 

I have used this my entire life, mostly whenever I’m in crisis, but it doesn’t have to be that way. A crisis can be anything, you lose your job, your kids aren’t speaking to you, your marriage is breaking up, or whatever it is. I found that usually when I’m in crisis, it’s hard to look at the entire picture because it’s so overwhelming. I just started with 10, 10, 10. I remember when I was going through my divorce, and the children were little, I thought, “What can I do in the next ten minutes?” My two babies were in diapers. The next ten minutes, the baby needs to be changed, or I need to eat. What can I do in the next ten hours, which is a day? What can I accomplish in this day and make it realistic, and then ten days, and then ten weeks, and then ten months? When I’m in crisis, I can only make it through the first ten. 

Ten minutes, ten hours, and ten days, I could probably make it that far but that helped. It’s like eating an elephant, one bite at a time. You don’t have to solve the problem all at once. Sometimes what you need right now is to talk to a friend, eat something, take a nap, or take a shower. If anybody reading knows what it’s like to truly be in crisis, and most of us have suffered through a divorce at some point in our lives, it’s devastating. It’s absolutely debilitating emotionally, let alone once you add the financial part of it into it. I developed that rule to slow myself down and think about things in small chunks that I could absorb at one time 

Tell us, what are you involved in? 

My story is I chose to do short-term rental. I ended up with three houses here in Nashville, Tennessee, but I got into it early. People thought I was crazy that I was letting other people stay in my house. I had never heard of it before either. 

F1A 2 Jennifer I. Grimson | Filing Bankruptcy

Filing Bankruptcy: Assessing and knowing exactly where you are can give you power.

 

When you say short-term rentals, you’re talking more about the Airbnb situation.  

Airbnb, VRBO. That was hugely profitable. That changed my life. I kept doing it, rinse, repeat, rinse, repeat. The way I did it was I kept moving into the houses because I had that ability to do it. My kids had grown up and I was able to go on my own and move into these houses. I detail that in my podcast if anybody wants to listen to it. One of the important things about building stability, empires, or whatever you want to call it is knowing that it’s okay to pivot.  

One of the mistakes I see people make all the time, and this is part of the 10, 10, 10 rule, is the first thing they do is try to cling to what they have. Shortterm rental blew up here in Nashville, Tennessee. Airbnb became a huge center for tourism. Everybody got in on the band. All of a sudden, I went from having these hugely profitable houses to competing with places that had rooftop decks and elevators, things that I was never going to compete with. My profit started to go down. I watched that for about a year and then I decided, “I’m out.” I sold all of them 30 days before COVID hit. COVID has had a huge effect on Airbnb. 

Perfect timing. 

I saw the folks around me, all the people in the Airbnb community around me going, “It will come back.” Some of them, it is coming back and they’re dealing with that, but the ability to pivot and to shift is important. I liquidated all of that and thank God because even surviving it, my carrying cost was $7,000 a month, I would have been a mess. We have apartment complexes. We invested in an apartment complex in Manchester, Tennessee, about an hour from here, 51 doors. Also, in a joint venture of 67 doors in Knoxville. For me, those are small investments. 

They’re huge properties. They’re a lot, but that’s the point of why I called the show Micro Empires. I didn’t put in all of my money. I put in a small amount of money. It wasn’t like I had a giant checkbook full of money. I used a vehicle like a self-directed IRA to purchase them. Now, I’m in the process of considering investment in some companies. I want to do some Angel investing. I also invested in a company called THIRDHOME, which gives us membership to it. It allows us to travel all over the world and stay in luxury properties. That’s what I’m doing. I mostly focus on investments that cashflow. I say, “Everybody has to be on the payroll, everybody has to work. 

Tell us about the Micro Empires. 

There comes a time when there's a lot more important things other than money.   Click To Tweet

I started Micro Empires because I wanted to share my story, but it wasn’t just about me. It was that I started to get angry. The more I discovered, the more I learned. I was like, “Why is this a secret?” It’s not really a secret, but it’s not readily available. Your 401(k) manager at your office is never going to tell you about a self-directed IRA because they probably don’t do it themselves. There are lots of other vehicles besides that that you can use. It took a lot of digging. I didn’t readily understand that I could borrow against it to pay off debts, and then pay it back so I’m paying myself back with interest, but a low interest.  

All of a sudden, my car note was gone. That is exponentially huge savings. I was able to do that. In our show, we cover self-directed IRA, house hacking, and short-term rental, these are all real estate-related. We also cover storage, everything from what money means to you. I talk a lot about money culture. I talk about money and faith. I interviewed John Manes. I know him and we were interviewing about self-storage, which is something that I’m considering investing in soon here. I never expected the story that came out of him, which is that he was living the six-figure life, living well above his means. He was unhappy. Ultimately, what changed his trajectory was he was suicidal. We don’t pay enough attention to how much money and our happiness are tied, whether it’s a lot of money or not having a lot of money. It’s much more important to understand.  

I’ve loved the trajectory of the show because it’s taken me through the personal journeys of some people who have made millions, some people that are just trudging along, and some people that are just getting started. The goal is to give tools. Every episode you listen to, you can walk away and say, “I can use that. I could do one thing to move the needle in my direction.” Especially folks that are 9:00 to 5:00 commuting every day, like I was a 9:00 to 5:00 and I had a good job at a good company and I was miserable. I really was. I stayed in it for three reasons, the money, the money, and the money. There comes a time when there are a lot more important things other than money. 

That is the focus of this show, to encourage people who are entrepreneurs or who want to be entrepreneurs to think about this thing and say, “If you want some financial freedom or if you just want some freedom from that structured 9:00 to 5:00 type of thing, try it out.” Maybe there’s something that you’re passionate about that you can do, and you can make money from. I’m hoping that message resonates with the people who are hopefully my core audiences moving forward. At the end of my presentations, I always want my readers to come away with three takeaways. What are three takeaways that you would give my people out there so that they can progress, and go in the direction of wanting to be more successful in whatever it is they’re doing? 

A lot of folks that I talked to, it comes down to brass tacks. How can I get started? How can I begin? The things that I’m talking about sound so advanced, and they aren’t. It wasn’t that long ago that I was just learning them for the first time. The first thing I always tell people to do is to assess where they are. A lot of folks that I talked to can’t tell me what’s in their 401(k), how much their mortgage is, how much they owe on it, what the interest rate is on their credit cards. For a lot of people, that’s scary. It takes bravery just to do that or to open the bills, but I do think that assessing and knowing exactly where you are gives you power. Usually, it’s not as bad as you think it is if you think it’s bad. I talk to people that are like, “I have a 401(k) from a job I had ten years ago, I don’t even know what’s in it or how much it is.” That is a goldmine. That can purchase an apartment complex for you for all you know. Assess, that would be number one.  

Number two is ask. There’s a book called Women Don’t Ask that everybody should read. It lays out all the science behind it. I will tell you this, asking is a muscle and you have to work on it. I worked on my asking muscle so much that sometimes I’m embarrassed about the things that I asked for. I get a 90% hit rate for the things I asked for. Once you assess where you are, and you think, “I want to move ahead with this.” Your next step is going to be surrounding yourself with the right people so you can be in the right pool, you’re going to have to ask. Ask to follow, ask to listen, ask to help, ask to meet, do all of that.  

Finally, it’s acting. Taking the step. Too many folks overanalyze, overthink as opposed to just doing it, even with this show. There used to be a time where I would prepare for days in advance, and even with my own podcast. Instead, it’s just about taking the step. Even if it’s failing, you’re failing forward no matter what because you’re going to learn. These would be my three things. I have a booklet on my website that they can download, it walks people through that thought process and it’s free.  

Tell us about your podcast and your website. Tell us how we can get in touch with you. 

F1A 2 Jennifer I. Grimson | Filing Bankruptcy

Women Don’t Ask: The High Cost of Avoiding Negotiation–and Positive Strategies for Change

My website is www.Micro-Empires.com. You can email me directly at Jennifer@Micro-Empires.com. I’m on all the socials either in Micro Empires or under my name. I’m a middle-aged woman, I’m not great at Twitter but I’m figuring it out. My goal in life is not to be a famous podcaster. It’s to provide great content. I’m not financially independent, I’m still building this. It’s sharing that dream. I have communities. I’m going to be doing some group coaching and some 30-day getting started offerings coming up in 2021 because that’s what people are asking me the most. I’m waiting and I’m still learning. I love when people reach out like you did. I’m still learning from people what they need. I don’t want to waste my time, your time, or anybody’s time. Those are the best ways to reach out to me. 

When and where can we hear your podcasts? 

It’s everywhere you get podcasts. If you subscribe on Apple Podcasts and leave a rate and review, I would appreciate it. They drop on Tuesdays at 11:00 Central and they’re weekly. They’re between 30 minutes to 45 minutes long. Some of my solo episodes are shorter. It’s a quick listen. The goal is just to come away with something that you can do that day. 

Thank you so much, Jennifer. I was so excited to have you on the show. You’ve given us such great information and motivation with your story. It’s a great story. I hope that everybody gets a chance to hear it and maybe emulate some of the things that you’ve done because the whole pivot and resilience thing, you epitomize that. 

Thank you. Vera, it’s such an honor to be here. I appreciate you asking me to be here.  

I can’t wait to see this episode and hear it because I’m in it now so I’m not listening like I would want to. I hope everybody else can read it and enjoy it just as much as I have interviewing you. Take good care and I hope to see you soon.  

Thanks, Vera. 

Thank you, Jennifer. 

Important links: 

About Jennifer I. Grimson

F1A 2 Jennifer I. Grimson | Filing BankruptcyJennifer was a single mother who lost everything…twice. The second time, she rebuilt by creating small “empires” for financial independence.

She created over $1.4m in income-producing investments with nothing more than a W2 and grit.

In 2019, Jennifer created the Micro Empires Podcast to share her story and to pull back the curtain on the path to financial independence.