0:00 I lived in a three bedroom, two bath, a little
town home and I had two of my buddies live with me and the rent that they paid me exceeded
my 100% housing cost.
0:07 So I was able to live there for free.
0:08 If any what's going on guys.
0:17 This is here and this is a segment that we
pulled off of our DeRosa Insiders community, which is a free community on Facebook on that
community.
0:23 People ask us questions when we go live on
every Friday at Noon Eastern.
0:26 This is a brief segment from that series.
0:29 Lots and lots of great stuff gets talked about
and a lot of it's exclusive for just the Insiders community.
0:33 We give you guys a little taste of it right
now so you guys can learn with us too.
0:35 We hope you guys can join us on Insiders.
0:37 Go to Facebook right now and click the link
in the bio or in the description below to join us on Insiders and we'll see you there,
everybody.
0:43 It's me and the one the only Vinny.
0:45 So last year, I appreciate you guys, Vinny.
0:47 You have a unique story because you got into
real estate investing through a certain vehicle that not everybody uses.
0:51 Although, although I think that most I may
say younger folks like yourself are using that vehicle to get themselves in real estate
investing and to expand their real investing portfolio.
0:59 And it's not something that everybody does.
1:00 It's something I did when I first got started,
which is one of the reasons why I like this because you got the courage to do this tactic.
1:04 Tell us a little bit about the tactic you
are expanding through in your real estate investing career and how it's going and give
us some tips, man.
1:11 Go for it.
1:11 Absolutely.
1:12 Yeah.
1:12 So Matt is alluding to is I live in a house
hack for those of you not familiar with the term really what that means is it's a way
to unlock some passive income or it's actually not passive, some active income from the residential,
your residential, your primary residents, right?
1:26 So lots of us have kind of unused space and
there are certain things we can do to unlock some income from our already primary residents.
1:33 So that's what I'm doing.
1:34 I know Max's done it before and you know,
there's a million and one ways to do it, but that's the premises.
1:39 How can you make some money from property
you already own?
1:42 And you know, everyone's situation is different.
1:44 A lot of us, you know, you alluded to a really
good point, which is, it's a great way to get started.
1:49 and there's a million ways to buy.
1:51 But, you know, I'll just start with saying
that there's a lot of advantages to people who are buying primary residence.
1:57 That isn't true when you're making an investment
purchase.
2:00 The, the financing, options out there for
a primary residence are, are usually much more advantageous.
2:05 And so it could be a lot more inexpensive
to get into a property, but then unlocking some income afterwards, it can be like a win-win.
2:12 So that's what I'm doing.
2:14 Yeah.
2:14 Well, here's what I found in my, in my house
hack.
2:17 And I think the one thing that people kind
of overlook, right.
2:19 The biggest check that anybody writes every
month for themselves is, is their housing expense, right?
2:25 It's bigger than food, vacation, car payment,
whatever it is you got that is your monthly, it's paying for that, you know, unless you
own your home free and clear and you still got real estate taxes and all that.
2:35 I even, I even would be, be willing to bet
you that for most people, even if they own their home free and clear, they are going
to have overhead for housing.
2:41 Does is it enables the investor you and, and
the occupant to wash out some or all of their personal housing expense by having somebody
live with them, you know, through roommates or through buying a small multi family like
a duplex, triplex and properties like that have very, very attractable financing terms.
2:56 Even in today's financing market, you can
still buy low money down duplex, triplexes, quadruple that kind of thing through agency
debt and through Fannie Mae, Fannie Mae F H A financing when I did my house, actually
I lived in a three bedroom, two bath, a little town home and I had two of my buddies live
with me and the rent that they paid me exceeded my 100% housing cost.
3:14 So I was able to live there for free, Vinny.
3:16 And I and I had a day job at the time I was
making a, making a salary before I, before I started the company derosa Group.
3:21 And so that washed out all of my overhead.
3:24 I paid my entire mortgages.
3:25 So I was able to enjoy my full salary, done
my job and had no overhead for living people discount that more than they should or don't
realize how powerful it is.
3:33 In two years, in that situation.
3:35 In two years, I pay, I paid off all my student
loans, which was well in the five figures, paid off all my student loans and all my credit
cards.
3:41 I was bad debt free or quote bad debt free
inside of two years in that scenario.
3:46 And that completely got me to drink the real
estate Kool Aid.
3:48 And that's after that I was all in and I was
able to scale from there.
3:52 Continue to live in the house hack until I
got married.
3:54 One of the regrets that I have is I didn't
convince my wife Liz who would have done it.
3:57 I think I didn't convince her that we should
buy a duplex.
4:00 When we, when we got married, we lived in
a single family home in the townhouse, but we should have bought a duplex and continued
that house hack arrangement, but we didn't do it, but that's ok.
4:06 We ended up ok.
4:07 So I, I'm, I'm all in on the house hack.
4:09 That's the number one thing I tell people
about, about doing this.
4:12 It is a sacrifice for sure.
4:13 And, and I'm in a similar situation, a single
family house.
4:15 I'm renting out a pair of bed with you to
speak frankly for a second.
4:18 I mean, when you buy your first house, most
of us, you're bleeding for a while like that, you saved that for years to make that huge
purchase.
4:25 And now you have a, like you said, the biggest
bill that's you, you're ever gonna, you're not bleeding for a little while, then you're
bleeding forever, man.
4:31 These are, this is a dude my house people.
4:33 Oh, it's an asset.
4:34 No, it's an asset for the bank.
4:35 It's a new for me.
4:36 You know, you, you spent years saving up for
this purchase and now you just not, not to, I mean to put it frankly, you lost a lot of
money.
4:43 You just put all that into something.
4:45 How are you gonna get that money back?
4:46 Right.
4:46 And this is really to recoup those funds and
maybe do it again or pay down some debt, you know, many different things, you know.
4:52 Yet another great thing about house hack is
you can get in if you're, because you're the primary occupant because you're the primary,
you're going to live there and because you're going to finance it through your first time
home buyer financing or whatever it is, you can get in, you know, 5% down or maybe a little
bit more down if you want.
5:05 But your out of pocket exposure is a good
bit less than it would be if you just bought yourself an investment property that 25% down
these days, if not more, if not, you know, 30 to 35% down, it could be, that could be
the possibility of what you have to lay down to do a deal.
5:19 Whereas buying a duplex or buying even a home
like that he's in now.
5:22 Very little money down.
5:23 So very little out of pocket, very little
cash exposure to the deal and maybe cash lower, at least reduce expenses coming out of the
back end.
5:31 I tell everyone when they first get started
this, this is a house hack.
5:34 100% down.
5:35 100%.
5:36 Every time should be your first investment
real is a house hack because let me go one further.
5:40 Let's pretend that Vinny didn't work for an
amazing organization like the DeRosa Group and he wanted to get out and start his own
real estate ventures, which you did, you do, I know you got your own things, but which,
which we encourage at DeRosa.
5:50 But let's say you wanted to start Celeste
Incorporated, right?
5:54 In being in being in a house hack, you automatically
have lower overhead, lower expenses.
5:59 And so the nothing you need to make each month
through your real estate investing business is much less.
6:04 So you could go and hang your license somewhere
or go do some side hustles or whatever to make the 2 to 3 grand you need per month to
meet your nut versus and that's not what you need, you know, if you weren't house hacking.
6:15 So the reason why a house hack is, it should
be your first investment talking to everybody, not just you is that it enables you to have
a lower overhead, a lower cost of living so that you don't have to make as much from your
old investing business.
6:28 It will enable you to grow faster than, than
you would if you weren't house hacking because you, you could buy a home and have a not that
you need to meet in the, you know, 678 $9000 a month kind of range.
6:39 if you weren't house hacking, but the house
hacking it lowers your expenses so that you can live on less and you can, you know, make
better decisions, make business based decisions, not income based decisions, right?
6:50 I love what you said too, but especially getting
started.
6:52 I mean, I do, it's, it's called ethos investments,
not incorporate, but ethos investments.
6:56 That's what I'm, I'm looking to buy, you know,
other properties at and just like I said, you buy this house that I'm in right now.
7:01 If I wasn't doing that, how am I going to
make any other purchases?
7:04 Like I said, I'm gonna be saving up, I just
set myself back years really buying this house.
7:08 And so, you know, renting out the rooms allows
me to recoup funds and do that.
7:12 Maybe not this again, but something again,
you know, and you can make, you can make decisions based on the, your asset growth and your long
term business growth versus based on your income.
7:23 And many, many people that are just in the
straight E quadrant that are not growing a business as well on top of maybe having a
job too.
7:28 And that's cool.
7:29 That's cool.
7:29 Jobs are ok.
7:30 You can make decisions that are not only income
based.
7:32 If you have a job, you're going to be making
most of your decisions based on your cost still living compared to your income, that's
it.
7:38 But if you're running a business and you're
house hacking, then you can make decisions that are based on your long term business
benefits.
7:44 Maybe a little bit of what do you call it?
7:45 A delayed gratification.
7:46 So, maybe Vinny continues to live in his house
hack for a little bit longer to increase his income, increase his asset building and stuff
like that.
7:52 So that eventually he can hop out of the house
hack and maybe buy a better house, live in a better neighborhood, a little better everything
because he's been stockpiling up his business growth.
7:59 Exactly.
8:00 Yeah.
8:00 Tell me what's next?
8:01 Your house hacking now?
8:02 What's do you want to, like, move out of the
house hack you're in?
8:05 Do you want to like, level up your house hacking
business?
8:07 Like what, what's, I mean, not like 5, 10
years from now when you get married and have kids running around but like, you know, what,
what's next on your vision board that you've got there?
8:15 Yeah.
8:15 You know, and let me take a step back to what
I always advise people with, with house hacking and to be clear a house hack doesn't need
to be, I'm renting out spare bedrooms like Matt already alluded to it could be like whatever
it's your, your life style, right?
8:26 Not everyone's going to be willing to rent
out their spare bedrooms.
8:29 What I always recommend to people is you have
to buy a house that because it's a little bit of an experiment, especially the first
time.
8:33 What if I hated it?
8:34 Like, what if I was renting out these rooms
and I was miserable the whole time.
8:37 So what I, what I always recommend to people
is you buy a house that you're comfortable with, that you're comfortable making the payments
with.
8:42 And you know, you do this, you run this experiment
and you see if you can make some money.
8:45 So Matt to answer your question directly,
you know, this house is something that I have a long term business.
8:50 I actually like the house generally.
8:51 I know it's in a good school district.
8:53 It's big enough to, you know, grow.
8:54 And I think that this house will kind of grow
with me as my, my life changes, you know, as a, as a young man here.
9:00 So, that's it.
9:02 Ok.
9:02 Yeah, so I'm gonna keep it, I mean, whether,
whether I'm living in here in perpetuity or another family in here and it's a rental that's
yet to be seen.
9:09 But the great thing is that this house allows
me to be flexible on that.
9:12 I like it.
9:13 I actually like the house, you know, so I
didn't talk about that.
9:15 I don't talk about this enough.
9:16 But with the house that I lived in, I eventually
moved out of when Liz and I got, and I continued to own it as a full rental, I just leased
out my bedroom and I moved into a single family or a town home that was, and I bought and
then I, you know, leased out my room.
9:29 And so I started making you know, the full
on cash flow that that property provided I held it for another two years and then, and
then sold it.
9:35 So you can eventually exit from the house.
9:37 You have to do it forever.
9:38 You can exit from it by a lease.
9:40 Like so he could if you wanted to go and you
know, move out in the verbs like I live now, then then he could lease out his last bedroom
that he's living in now and keep the property as a revenue stream.
9:50 So house hacking doesn't tie your hands to
house hacking forever.
9:53 You should house hack for a little while and
then eventually you can move out.
9:56 You don't have to live there for 30 years.
9:57 You live there for the entire time that you
have that mortgage and if you move out, you don't keep it as a residence anymore.
10:01 The bank may call you out but they're gonna
give you 90 days or whatever for you to, to, to remedy and refinance it or sell it or whatever
you gotta do.
10:08 And I've never heard of that happening to
anybody who's house hacking moved out and the bank called called you know, cry foul
ball.
10:14 Yeah, I mean, and, and let's be, let's be
honest here with one thing that I think is coming through in just this conversation is
that it provides you optionality.
10:20 So that's a, there's like three or four different
options.
10:23 I can rent out this room, buy something smaller,
enjoy it until this house becomes, you know, necessary to live in or whatever.
10:29 I can just rent it out to a single family
house when you're running your numbers, try to make sure that the house that you're buying
works as a single family also will provide you optionality.
10:37 There's a lot of different ways about this.
10:39 The other thing is the house that I'm in and
I encourage people to do this too.
10:41 There are a few things I have in mind, a few
ways to add value to this house that I'm looking at and I would consider doing maybe before
disposition or selling.
10:49 But you know, the there's just options here
and recouping your funds will allow you to play that field because now I have the money
to do the work on this house house and then sell it in up in a trending upwards market
when that happened.
10:59 The full story is I was looking in New York
for a property.
11:02 I was looking for a house in New York obviously.
11:04 And well, now I live in Charlotte, let me
say that two totally, totally different markets, but I was dead set on doing a house hack in
either of those markets just for a lot of the reasons.
11:12 Matt said there's no, you know, better way
to recruit funds and you're gonna be bleeding for a little while New York, I was going to
buy a house out there.
11:18 COVID happened fast forward.
11:19 I'm I'm working remote.
11:20 Why stay there when I can move maybe somewhere
a little more affordable.
11:23 But let me say this.
11:23 When I, when I decided to move to Charlotte,
I realized that single family homes were renting here for $1200 a month, 1500 this is two years
ago.
11:31 So it's a little different now.
11:32 But why would I buy a duplex and then try
to rent out for $1200 a month?
11:36 Why would a renter come live in half a duplex,
you know, one half side of a duplex with their landlord on the other side when they can rent
a single family house.
11:42 So for me to make the house hack numbers work,
I needed to take a model of renting by the rooms because renting by the rooms produced
more cash flow.
11:48 It also was easier for me to find the asset
that I'm in because you know, the the duplex markets a little smaller than residential
homes.
11:54 You have a million to choose from.
11:56 I settled on that.
11:57 I needed three spare bedrooms to, to cover
my expenses.
12:00 That's because I determined that it was, you
know, around $700 a month again, two and two years ago, two per room.
12:06 And how do determine that I stole the pictures
from Zillow went on Craigslist and posted them up for sale before I made my offer on
my property.
12:13 I made sure that, you know, I had people lined
up like as if they were ready to rent it, you know, I didn't put an offer in and I just
politely told them sorry the house has taken or something, but that was an experiment that
I encourage everyone to do even in the single family rental market to test see if you can
actually rent it for that much.
12:26 So now we in a four bedroom, you know, four
bath house and renting out the spare bedrooms.
12:29 Let me say one thing real quick.
12:31 And then Eric, I'm going to bring in what's
great where we were talking about financing and buying single family homes as a primary
residence.
12:37 And the the the advantage you have from a
financing was able to put 5% down here.
12:41 And again, we look at this like an investment.
12:42 So let's talk about some returns here.
12:45 You were able to get into this type of house
for it would cost $23,000.
12:48 All in the rent was I was collecting $2000
of rent per month.
12:52 Really great return because you're you're
in, you have less skin in the game.
12:55 Really good cash on cash guys.
12:57 That's house.
12:58 This is a segment that we pulled off of our
DeRosa insiders community, which is a free community on Facebook and you guys can join
me live.
13:03 What we do is we go live on Facebook once
a week.
13:05 On Friday noon Eastern.
13:07 And people come on and join me live and they
chat with me.
13:09 If you guys want to go next level and talk
to me and the DeRosa team about stuff that's going on in the world or in real estate or
whatever it is.
13:14 Come and join Facebook right now and go to
DeRosa Insiders free Community.
13:18 Join us there, Eric.
13:19 You're at a, at a golf, you, you must be at
a golf outer, right?
13:21 All right, I'm gonna bring you in Eric.
13:24 What's going on?
13:25 How you doing?
13:26 Hey, how you doing, brother?
13:27 Since we were talking about house hacking,
I just wanted to share a little bit of my story, right?
13:31 Because everyone's different.
13:32 And I don't hear this a lot.
13:33 So I'm in the military.
13:34 I retire this year.
13:35 And what I've been doing the past few years,
I would, what we call a bank hack through the va loan, the Veterans Affairs loan.
13:42 So I would buy a single family home basically
for free live in it.
13:47 The army would move me two years later.
13:49 And then when, when I move out, I then rent
it.
13:51 So I rinse and repeat and I buy a home for
free, zero down, zero, everything I move in, live in it, move out and rent it out and that's
how I started building my portfolio.
14:01 So really for the viewers it there, look at
your situation, look at what you have and see what resources you can get.
14:07 And it's not always the norm with, with rent
out rooms running out this, running out that sometimes a banking.
14:12 So, so just look at your situation, reach
out and, and get creative and then I was gonna say, then you get to spend your Fridays at
a, at a golf course.
14:19 Every, every I love it.
14:20 You said too.
14:21 And I, I know lots of people leveraging the,
the va financing option.
14:24 It's such a great tool that everyone should
be aware of if it applies to you.
14:28 What did that allow you to do?
14:29 So what's your, how many homes are you're
able to acquire for that, that process?
14:32 So I essentially got two free homes out of
it, two single family homes, those two homes in turn, I have now, you know, a couple 100
grand of equity in it alone.
14:41 And that again, that's what zero down.
14:43 So even if you don't have any money, like
figure out the resources that you can provide yourself in and start getting at it, just
get in the game.
14:48 That's the important part.
14:50 Yeah, there's, and there's really not a better
way to get in the game.
14:53 There's there.
14:53 You don't have to put as much skin in the
game, especially if someone in your situation there was, I guess, sounds like no ski in
the game and it's not only pays for itself, but it now it's paying you, it wasn't just
free.
15:01 It's like a, it's, it's a gift kind of, you
know, so it's really great, good on you for, for taking advantage of that.
15:06 Did you find it difficult to find roommates
last tenants?
15:08 How'd that go for you?
15:09 It's people like me looking to find homes
because in the military people are, are coming in four times a year in and out.
15:14 So it's a constant side, a constant cycle.
15:16 And I look, since I'm a married man with kids,
I look for a family that's in a safe neighborhood has, has a good neighborhood playgrounds and
everything else.
15:23 So I know when I leave and rent it out that
I will be renting out basically to the same type of people.
15:29 I am people who will take care of their, of
the place who need a home.
15:32 That's the market that I'm in and that's kind
of what I do.
15:35 So I started from that and then just continue
to buy homes.
15:37 Yeah.
15:37 Well, congrats on all that and thanks for
joining us.
15:39 I really appreciate that for having me on.
15:41 I really appreciate it.
15:42 And the only thing I have to say to everybody
else is really if you're trying to get into the game, there's 1000 different ways to skin
the cat, just take action.
15:49 You're never going to be comfortable with
the decision.
15:51 But as long as it's the most educated decision
you can make then and there, go for it.
15:55 Pull the trigger.
15:56 All right.
15:56 There you guys have it.
15:57 That's a whole other way to do it.
15:58 I love what he said about that and how you
have opportunities and what you have to do is just look at your particular situation
and maximizing the opportunity that's available.
16:06 You, it's, it's a really great way to get
in.
16:08 It's probably the least cash intensive way
to get involved in real estate and, and get your first rental under your belt.
16:14 You learn a lot of lessons about being a landlord.
16:17 You learn, you know how to, how to create
a lease that's airtight and you learn how to vet tenants.
16:22 And these are really great lessons to learn,
especially when you're under the same roof and you can kind of keep an eye on it.
16:26 And so one other tip I'll just throw out there
is I have folks on a month to month lease here.
16:31 I love that model because a it provides flexibility
to the, the roommates that are coming in here.
16:35 It's an opportunity for folks because, you
know, typically if you're going to rent a room in a, in a single family house, you might
be more transit, you might be looking for something short term.
16:42 It's not usually a long term solution.
16:44 So I love providing that, that solution to
people because you're looking for a roommate, right?
16:48 It's not, they're not just tenants and you
don't just need someone who is is comfortable paying.
16:51 You don't, it's not just the the standard
tenants getting screening process, you're looking for a roommate and someone that you're
gonna be living with.
16:57 So it's a really great way to get started.
16:59 If you guys like these conversations, if you
guys wanna join me and ask real live questions of me and the DeRosa team for things that
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