Before I discovered real estate investing, I read financial education books with the sole purpose of learning how to manage my own money and develop financial literacy. But as mentioned in my previous blog, my mindset completely changed when I learned that financial freedom was possible through real estate investing. I fell in love with the idea of passive income, stable cash flow, tax advantages, and leverage that REI had to offer. But I had one problem …how do I get started?

Investing in real estate requires money, whether it’s your own or capital that you raise from other people. Having just graduated from college, my pockets were beautifully empty, and I certainly didn’t feel comfortable raising capital from family and friends before I had done any deals myself. For a brief period of time, my plan was to save up for a few months, or even years, before I jump into the world of REI. That is, until I discovered the House Hacking strategy paired with the amazing mortgage product that is the VA Loan!

The best part about the house hacking strategy is that, instead of saving up until you can put down ~20% down payment on a rental property, you can get started right away with owner-occupant loans that require anywhere from 3.5% to 0% down payment. Some common options include the VA Loan, FHA Loan, and USDA Loan. On top of that, you can buy up to 4 units, as they all fall under the category of residential property just like a single-family house. As Active Duty Navy, it was an easy choice for me to go with the VA Loan, which requires 0% down payment (note: there are still closing costs). In fact, I ended up utilizing the VA Rehab Loan, which funds 100% of the renovation cost into the mortgage and still requires 0% down payment. (Details on this on another post)

A huge shout out to Active Duty Passive Income for introducing me to the house hacking strategy!

As soon as I arrived in my first duty station (Norfolk, Virginia), I found a local real estate investing meetup to connect with investors in the area. I was lucky to find an amazing community of Active Duty/Veteran real estate investors that gave me the encouragement I needed to get started. At the House Hacking Seminar that Mike Foster hosted, I connected with my agent, now a good friend Alex, who understood the mechanisms of a successful house hack and the ins-and-outs of the VA Loan process. After 6 months of educating myself and networking with other investors, I closed on my first duplex, which I am currently house-hacking (at the time of writing):

Rental Income from Roommate$650
Rental income from Other Unit$1200
Gross Rental Income$1850
Monthly Mortgage (including taxes and insurance)($1250)
Electricity (Solar Panel installed)($79.05) 
NOI (Before CapEx, Repair, Vacancy)$408.95
Note: this is based on the assumption that both the extra bedroom and other unit are rented.

Meaning that I am getting paid $408.95 to live in my own house after all my monthly mortgage and utility bills are paid for by the rental income from my roommate and tenants from the other unit. But as savvy investors know, there are more expenses than just the mortgage, which is why I am saving all 100% of the $409 in order to build up the reserves for future CapEx, repairs, and vacancy. In a year, that would leave me with nearly $5000 in reserves. Once I build up a sufficient amount of reserves, I plan to move out and fully rent out my duplex:

Rental Income from Unit A$1250
Rental income from Unit B$1200
Gross Rental Income$2450
Monthly Mortgage (including taxes and insurance)($1250)
Vacancy (8%)($196)
Repairs (5%)($123)
CapEx (8%)($196)
Property Management (10%)($245)
Total Expenses including Mortgage($2010)

This means that I will be earning $440 monthly in passive income from this duplex after putting aside enough money for any potential expense. So when I go on a deployment in the near future, this duplex will be making me money without the stress of any repairs, vacancies, or finding new tenants. And not only is the rental income paying off my mortgage, it’s slowly building equity, which I can access in the future to do even more investments!

Closing Day with my awesome broker Robert and rock-star agent Alex!

As you have seen, house hacking allows me to live for free while I essentially save all of my tax-free Basic House Allowing (BAH) from the Navy ($1,551.00 per month at the time of writing). This allows me to rapidly build capital so that I can invest in more real estate in the near future. Once I fully rent it out, I will be able to enjoy passive income while continuing to build equity in the property. But personally, I believe the BEST benefit of house hacking comes from the vast range of experiences that I was able to gain as a homeowner, real estate investor, landlord, and renovation project manager all in this single deal:

  1. Homeowner – learning the home purchase process and managing my own house
  2. Real Estate Investor – running the numbers, analyzing properties, and building my team
  3. Landlord – listing the unit/room, screening tenants, and self-managing
  4. Renovation – working with my contractor to manage a renovation project and even doing some of the projects on my own!

This is a very basic overview of my house hack story. There’s certainly a lot more to it underneath the surface: finding the right team members (agent, lender, contractor, and more), searching for the right property for months, running the numbers, negotiating with the seller, doing the due diligence, managing a ~$35,000 of renovation project (all financed into the mortgage), painting the entire duplex with my friends, learning how to be a good property manager, and more. But don’t worry, I will cover each step of my journey in the next few posts. I hope this inspired you to house hack your way into the amazing world of REI. Don’t forget to join the investors list to stay up to date with my journey to Financial Freedom! 🙂

The goal of the Financial Freedom Journey Blog is to document my journey from my “aha” moment to when I achieve Financial Freedom and, hopefully, inspire others (yes, you) to start their own journey too.


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I am not a qualified/certified financial advisor, CPA, nor a lawyer. The contents on this site are for informational purposes only and does not constitute financial, accounting, or legal advice.