So today’s topic is going to cover investing in your financial future and creating something meaningful for yourself. So way back when, when I first graduated college, there was a big moment of, oh crap, where am I going to work? And sure enough, as the days, months, weeks, seconds, hours, whatever time measurement you go for, as the time passed, it started to become more and more clear that it is important to do something for yourself. Because sure enough, no one is going to hand you anything in this life and you’ve got to build it for yourself.
So that was pretty clear early on. Fortunately, I was able to get in touch with one of my coworkers where we were talking about investing and just general money practices and he recommended a podcast. That podcast was the Bigger Pockets podcast where they talk about real estate, real estate, investing and all things property investing. After listening to a few episodes, I fully understood that this is the route that I need to start going towards. I picked up a few books like Rich Dad, Poor Dad. And sure enough, a couple of months later, I was able to purchase a house hack, which is essentially a way to live in one of the units or one of the bedrooms or the home and then rent out a part of the property as well.
What is house hacking? Streamlining your financial future
If you have a garage apartment or duplex, you rent out the other unit or just some other way to create an income and reduce your housing and living expenses, which is a lot of times the most expensive part of living. So all things considered, that was a great way for us to get started on our journey.And sure enough, we went from having a $1,500 mortgage down to about $700. And then after a couple of renovations, we upgraded the property, and then we’re able to get it out of pocket expense down to about 300 or 200, $300 depending on the month. So that was a very helpful way for us to build a meaningful cash flow or heavily reduce our expenses.
So if you’re reading to this and you’re looking for ways to create more income for yourself or other ways to build something meaningful, I would heavily consider getting started with real estate, specifically in the house hacking department. And that way you will then take your biggest expense for a lot of people, which is housing, and reduce it heavily into a few hundred dollars (or less).
House Hack Methods
If you rent out bedrooms where a lot of people might have a five-bedroom home and the rent each one out to someone, whether it’s a business professional or traveling nurse or something of that nature. It’ll go from $1,000 $2,000 all the way to renting each one out for $600, $700, or $800 Sure enough, after four bedrooms out of the five, are rented out. You’re making well over that amount, so you’re making $3,200 a month on a $2,000-a-month mortgage.
Things are good. So I would heavily recommend considering real estate as one of your main methods, and I understand it’s not the cheapest option, but you can absolutely get some affordable loans at your disposal.
Setting up your house hack and financial future
One of the recommendations that I would give is the FHA loan, which is essentially all that is provided for people that live in the property as a primary residence. And it’s a first-time home buyer option where you can live in there for 3.5% down. A very attractive option for a lot of people. That’s what we did, my wife and I, and it worked out really well. And fast forward to today, we now have two properties.
We did it again on the next one, but we did it a little different because our FHA loan is still tied up in the first one. And in order to get that loan again, we’d have to refinance, which means we would have to give up our really good interest rate that we got back in 2020 when rates were really low.
So at this point, we have another primary residence loan that comes in at 5% down. So still great.It’s lower than anything under double digits is fine. I would ask around to some lenders and ask for low money down options as far as down payment and they will be happy to assist you there.
And then of course with that, the interest rate will very likely be a little bit higher just because there’s a little bit more risk associated with them with those types of loans. But again, at the end of the day, the whole goal is to get into the property with the least amount of money possible.
Whether you want to Airbnb the units or the property that you’re not living in or you just want to do long-term rentals, specifically catered towards business professionals or travel nurses, which I would recommend because the tenants and the units are a lot more respectful of the property. Whatever the case, whatever the route works, that is the ideal scenario.
Now I’m not a professional, I’m just an enthusiast. And I love the topic of investing, business, relationships, personal and self-development, and all things betterment, because this journey is a long one, and I think it’s important that you have the support and the help needed so that we can all get there faster. So thank you for reading. Please leave a comment below on your thoughts, perspective and anything else on your mind!
Listen to the Podcast episode here: https://spotifyanchor-web.app.link/e/PVhRF6z8Ivb