This week, I want to expand on the topic of "no money down" investing, which I discussed with Brandon Turner in Monday's interview.
Today I want to talk about what Brandon calls "house hacking." that is, owner occupied investment properties. A lot of people use this technique to get started in real estate, often unintentionally.
You can purchase a duplex, live in one part of it, and rent the other unit out. The person you are renting the unit to will be paying all or a good part of the mortgage you owe. So because you don't have to pay a mortgage, you have money available to renovate your unit. Then, when the lease is up on the second unit, you can live in that side and renovate it while renting out the unit you used to live in. The idea is that after a few years you will be able to sell the whole property for a good profit because you essentially flipped the property while living in it. You could take that profit and put it into your next property and keep going in this manner.
This is a way to get started in real estate without having to spend much of your own money, and you could theoretically do it over and over again until you've built up great savings.
There are a few different things to be aware of from an accounting or tax standpoint which I won't go into right now, but if this is a method that interests you, it's worth looking into further.
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