Speaker 1: Episode eighty, how to get other people to pay your
Speaker 1: mortgage with Craig care Lap. Welcome to the Frugal Friends podcast,
Speaker 1: where you'll learn to save money, embrace simplicity rights, and
Speaker 1: liberate your life. Here your host Jen and Jill Do
Speaker 1: Do Do Poo. Welcome to another episode of the Frugal
Speaker 1: Friends podcast. My name is Jen, my name is Jill.
Speaker 1: Today we are talking about how to save money, big
Speaker 1: money on the biggest expense that you probably have every month,
Speaker 1: and that is your mortgage or your rent. And we
Speaker 1: are so passionate about cutting expenses here because little changes
Speaker 1: can make such a big impact in your financial life.
Speaker 1: So we're going to tell you how you can make
Speaker 1: a big, big impact, Yeah, by being resourceful and creative
Speaker 1: and Craig's got some really great tips. So we encourage you.
Speaker 1: Got you all to listen through this episode, um and
Speaker 1: figure out how this might work for you, regardless of
Speaker 1: the type of living situation you're in. So yes, excited
Speaker 1: to see what comes of this. And first art sponsors
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Speaker 1: I love making friendship bracelets. I would work on them
Speaker 1: every day. I probably have fifty stocked up. But I
Speaker 1: didn't have many friends, so I didn't give them out
Speaker 1: or get any or wear any um. I just had
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Speaker 1: I've heard today. And I'm a therapist. Sure, tiny gen
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Speaker 1: it actually a real sponsor for us. We digress. Let's
Speaker 1: get into this interview. Hopefully this will make you happy.
Speaker 1: I'm sure Craig would be your friends. I'm I'm sure.
Speaker 1: He seems like a great guy. He is on staff
Speaker 1: with Bigger Pockets, which is a real estate investors group.
Speaker 1: It helps people find real estate deals, helps investors and
Speaker 1: landlords and flippers get ideas, get together and just help
Speaker 1: each other. It's a website, a podcast, a book publisher,
Speaker 1: and Craig's is their latest book. It's called The House
Speaker 1: Hacking Strategy and it has fantastic I have been flipping
Speaker 1: through it and it's full of good, reasonable advice on
Speaker 1: how you can have other people literally pay your mortgage. Yeah,
Speaker 1: that's something I'm super into. Let's do it. Welcome to
Speaker 1: the show, Craig. We are so excited to have you here. Yeah,
Speaker 1: thanks for having me. I really appreciate you having me
Speaker 1: on absolutely such a good topic to talk about. You know,
Speaker 1: we have mentioned house hacking before when we talk about
Speaker 1: ways to save money on housing, but we've never done
Speaker 1: a deep dive into it, and it can seem really
Speaker 1: intimidating if you don't know the ins and outs of it.
Speaker 1: It's a simple concept, but still any any time you're
Speaker 1: buying a house. That's like a big deal. So I'm
Speaker 1: excited to pick your brain and talk about all of
Speaker 1: the ways you lay out how to do house hacking
Speaker 1: in your book, The House Hacking Strategy. H Well, I'm
Speaker 1: excited for you to pick my brain. So yeah, all right,
Speaker 1: so let's basic. Yeah, don't invite us that deep. Yeah.
Speaker 1: For for people you may not have heard us talk
Speaker 1: about house hacking or forget what it is. What is
Speaker 1: house hacking? Yeah? So, house hacking is the idea that
Speaker 1: you purchase a one to four unit property for a
Speaker 1: low percent down typically three to five down. You live
Speaker 1: in one part, rent out the other parts, such that
Speaker 1: the rent is fully covering your mortgage, and you live
Speaker 1: for free or maybe even less than free, meaning you
Speaker 1: get paid to live there while you're building equity in
Speaker 1: a house, while you're paying down your loan and just
Speaker 1: saving tons and tons of money. That was a really sustinct,
Speaker 1: like elevator speech on house hacking. Thanks for that you
Speaker 1: have right. I'm curious about the low percent down. Why
Speaker 1: is that part of the house hacking equation, because many
Speaker 1: people believe that you need to in order to buy
Speaker 1: a house, you need to put down twenty or but
Speaker 1: that's just not the case. When you actually are planning
Speaker 1: to live in the property, you can put down three
Speaker 1: to five percent down, And if it's your first home,
Speaker 1: there might be even some other products out there, like
Speaker 1: loan products out there where you can put even less
Speaker 1: than that down. And if you're in the military, there's
Speaker 1: a v A loan where you can actually get into
Speaker 1: a house with zero percent down. So it's just a
Speaker 1: really powerful way to start to purchase your first home
Speaker 1: and just totally eliminate that rent expense or mortgage expense, right.
Speaker 1: It really reduces some of the barriers to intrigue by
Speaker 1: that specific portion of this. How did you get into this, Craig, Yes,
Speaker 1: So it all started when basically I really hated my
Speaker 1: job out in Silicon Valley when I was living out
Speaker 1: there at the time, and I just realized that I
Speaker 1: did not want to work for forty plus years. Really,
Speaker 1: the straw that broke the camel's back was when my
Speaker 1: girlfriend at the time and I were going down to
Speaker 1: Big Serve, which is like a beautiful part of California
Speaker 1: with no cell reception, had a wonderful weekend and on
Speaker 1: Sunday night, I got back in my boss at me
Speaker 1: an email saying I had to get this report out
Speaker 1: by eight a m. Eastern time on Monday a k a.
Speaker 1: Five am Pacific. And so was the last night that
Speaker 1: I was going to spend with this girl for a
Speaker 1: very long time because we were both moving away. So
Speaker 1: we were both really upset. She was really upset, I
Speaker 1: was really upset, and I just thought to myself, Man,
Speaker 1: is this what the rest of my life is going
Speaker 1: to be like I continue to proceed through this career path?
Speaker 1: Is this is what it's going to happen? And I
Speaker 1: just decided that there's no way I want this to happen.
Speaker 1: So I discovered the whole idea of financial independence, and
Speaker 1: then I figured about out about real estate, bigger pockets,
Speaker 1: house hacking, and I just realized that house hacking was
Speaker 1: by far the best and most effective way to achieve
Speaker 1: financial independence very quickly. Wow, so what is your quitting story?
Speaker 1: How how soon after that experience, that pivotal time did
Speaker 1: you leave that job? So I discovered I'll tell you
Speaker 1: the exact date, so June eleventh, two sixteen, is when
Speaker 1: that email was sent to me. Then I just started
Speaker 1: to do education for like six months while at the job,
Speaker 1: while basically like all of my days were consumed of
Speaker 1: real estate, education and financially and it's education. And then
Speaker 1: I went on a trip to South America for a month,
Speaker 1: came back, and I quit on March seventeenth, I believe
Speaker 1: it was two thousand seventeen, and then moved to Denver
Speaker 1: and started at Bigger Pockets on April three. Seen, so
Speaker 1: that whole learning and figuring stuff out kind of took
Speaker 1: nine months, and I closed my first house sech in June,
Speaker 1: so that's kind of where the time it really started. WHOA.
Speaker 1: It's so amazing to me to look back on some
Speaker 1: of these very pivotal moments. I'm sure your previous boss
Speaker 1: would have had no idea that sending that email on
Speaker 1: June eleven, two thousand and sixteen, it was going to
Speaker 1: set the trajectory for you of well leaving but all
Speaker 1: these other things that you've pursued in life. It's just
Speaker 1: so mind boggling to have that perspective on things and
Speaker 1: knowing that it can be something so small in either
Speaker 1: direction that can set our life trajectory, oh for sure.
Speaker 1: And it's just like that was just a straw that
Speaker 1: of the Camel's back. Obviously there were a lot of
Speaker 1: things leading up to that, but yeah, I mean, I'm
Speaker 1: actually super grateful for hating my job and all of
Speaker 1: that happening, because if I hadn't gone through that, then
Speaker 1: I definitely would not be where I am today. So yeah, gosh, Craig,
Speaker 1: it's so encouraging I think, and for anybody that's that
Speaker 1: might be listening or as we're in conversations with people
Speaker 1: that yeah, there there are options. Sometimes we can feel
Speaker 1: so trapped either by our finances or our work situation
Speaker 1: or living situation to think like this, this is how
Speaker 1: it's going to be for the rest of my life,
Speaker 1: and it doesn't have to be so trapping that that
Speaker 1: there are options to be able to get out. So
Speaker 1: that's a whole other reason why I'm excited about this conversation,
Speaker 1: because it's creative. House hacking is a means to possibly
Speaker 1: financial independence if that's what you're interested in, or other
Speaker 1: financial goals. So incredible. Thanks for sharing that backstory. Yeah,
Speaker 1: no problem, that's what it's all about, right. What did
Speaker 1: that first house hack look like for you? Yeah, so
Speaker 1: the first out stack is definitely the most entertaining story.
Speaker 1: The first one was a duplex that I bought in Denver, Colorado.
Speaker 1: It was a mile and a half from the office
Speaker 1: that I worked and about five blocks north of City Park,
Speaker 1: which is Denver's largest park, And so would say they're
Speaker 1: both units were one bed, one bath, top bottom. I
Speaker 1: rented out the top lived in the bottom, but the
Speaker 1: rent from the top wasn't quite covering my mortgage for
Speaker 1: the whole unit. So what I did instead was rented
Speaker 1: out my bedroom on Airbnb, and I made a quasi
Speaker 1: bedroom out of the living room by putting up a
Speaker 1: curtain in a room divided with a frut on behind
Speaker 1: it and slept on a foot for a year and
Speaker 1: had a revolving door of Airbnb guests coming in and out.
Speaker 1: Oh my gosh, I that is insane. Yeah, how did
Speaker 1: the airbnb guests respond to that? There? Guests, they knew
Speaker 1: what it was, right, they rented out a private room,
Speaker 1: not an entire place. I was very elier and had
Speaker 1: pictures of like the curtain and stuff in the pictures,
Speaker 1: so they knew the kind of what to expect. And
Speaker 1: most people were actually really welcoming to it because they
Speaker 1: want a local experience and because I was a quote
Speaker 1: unquote local. I could kind of tell them what restaurants
Speaker 1: you go to, what are fun things to do? If
Speaker 1: they were alone, I kind of was their friend for
Speaker 1: a few days. I'm gonna come home to talk to
Speaker 1: you know. I've made it. I made quite a few
Speaker 1: friends doing that, and some I'm still in touch with today.
Speaker 1: That's awesome, that's amazing. How long I mean that takes
Speaker 1: a certain type of person to be able to share
Speaker 1: a space like that, like you're living space. How how
Speaker 1: long did you have capacity for that type of situation? Yeah,
Speaker 1: I did it for one year. Towards the end, it
Speaker 1: was getting a little bit rough. I don't I don't
Speaker 1: think it was because the situation was rough. It was
Speaker 1: just because I could see the end. So I was
Speaker 1: just so ready to to be out and have my
Speaker 1: own room again. But I'll be honest, like, if I
Speaker 1: had to go back again, I would do it all
Speaker 1: over again because it put me in such a great
Speaker 1: financial position. It was really the foundation everything that I
Speaker 1: have right now. And also it's a good story, so
Speaker 1: it gets people interested and I can write about it
Speaker 1: and talk about it and stuff. So I didn't even
Speaker 1: think about that at the time. But yeah, right, for
Speaker 1: anybody else considering sharing space like that, what what would
Speaker 1: you have them to think about beforehand, Like any tips
Speaker 1: that you learned from that time of not really having
Speaker 1: your own space. There's a common misconception out there that
Speaker 1: someone is going to come in and murder you or
Speaker 1: something like that. And I will say that most people
Speaker 1: that come into airbnb s are good people, and most
Speaker 1: people in the world are good and I will always
Speaker 1: continue to believe that, and you do make a lot
Speaker 1: of friends that way. Now, it is a little bit
Speaker 1: it feels a little bit weird, right, Like I own
Speaker 1: this structure and I've got people above me making noise.
Speaker 1: I've got people in the bedroom making noise, and I'm
Speaker 1: just like confined to the sixties square foot space in
Speaker 1: my living room that I created for myself. So it
Speaker 1: is a little bit of a slog to get through it.
Speaker 1: But just for one year, Like doing that just for
Speaker 1: one year has probably taken decades off of my life,
Speaker 1: So I will take that's a great point having it
Speaker 1: be time limited, that yeah, it probably wouldn't be feasible
Speaker 1: for an indefinite amount of time, but to have said, yeah,
Speaker 1: I'm going to do this because it's going to help
Speaker 1: me reach a goal. And that is one of the
Speaker 1: ways that you like strategies that you say house hacking
Speaker 1: can be. It doesn't have to just be while you
Speaker 1: did buy a duplex, it's not. You can buy a
Speaker 1: single family home and rent out a room like on airbnb.
Speaker 1: That's what we do. We have a three bedroom home
Speaker 1: and the front room and the front bathroom we rent
Speaker 1: out on Airbnb. And we used to be booked solid
Speaker 1: until we had our baby, and now we just do
Speaker 1: it kind of, maybe two or three stays per month,
Speaker 1: and it's something that helps us with the mortgage. While
Speaker 1: we were doing it NonStop, it almost paid for our mortgage.
Speaker 1: But yeah, so many people are good people. Some are
Speaker 1: a little questionable, but for the most part, everyone is
Speaker 1: super cool. If you're the type of person that's willing
Speaker 1: to stay in somebody's home, you're just like on a
Speaker 1: different level than somebody that's not willing to do that,
Speaker 1: and I think that makes that type of person really cool.
Speaker 1: So we've loved all of our guests. Yeah, say, there
Speaker 1: were very few that I didn't like. There were and
Speaker 1: there were something that were almost just too friendly and
Speaker 1: I just couldn't wait to get them out because they
Speaker 1: wouldn't shut up. But that's the flip side of getting murdered.
Speaker 1: It's getting too much kindness. Right, If you can handle
Speaker 1: the kindness, then Airbnb will be good for you. Okay,
Speaker 1: exactly where all do you house hack now, Craig? Because
Speaker 1: I I was saving so much money on that first one,
Speaker 1: I was able to save up and buy a second
Speaker 1: house hack. So the second one, which is not where
Speaker 1: I currently live now, but the second one was a
Speaker 1: single family house that I rented up in Thornton, Colorado,
Speaker 1: which is just outside of Denver. And this was a
Speaker 1: five bed, two bath house and this time I actually
Speaker 1: had my own bedroom, so I lived in the bedroom
Speaker 1: and rented out all of the other bedrooms and on
Speaker 1: a long term lease. So no Airbnb on this one.
Speaker 1: And that was fully you know, that fully covered my
Speaker 1: mortgage plus more like, it was about a thousand dollars
Speaker 1: over my mortgage and I was living for free. So
Speaker 1: you add all that up and you're talking close to
Speaker 1: of savings per month. That doesn't even include really the
Speaker 1: loan pay down and the appreciation on the property. So
Speaker 1: it's just such a powerful way to build wealth. Sure,
Speaker 1: and I love that you encourage people to do this
Speaker 1: even with single family homes. I think that that's a
Speaker 1: lot of that that's a barrier for a lot of
Speaker 1: people thinking, well, I don't have a duplex or a triplex,
Speaker 1: so I can't do this. But you're saying no, live
Speaker 1: in a room, share the rest of the space, or
Speaker 1: rent out a room or rent out the basement, or
Speaker 1: figure out creative ways to be able to utilize the
Speaker 1: space because chances are I mean, well, nobody can be
Speaker 1: in the same room or in different rooms all at
Speaker 1: one time. So usually you got space you can share
Speaker 1: with people and make some money for sure. Yeah, it's
Speaker 1: always rich dead, poor dad or Robber Kasai said it
Speaker 1: best right when it's the whole saying you can't versus
Speaker 1: how can you? So really just kind of think creatively
Speaker 1: and figure it out because there's a way to do
Speaker 1: any Yeah. I mean, we love that about frugality. It's
Speaker 1: all about becoming resourceful and not just stopping your mindset
Speaker 1: at oh I can't do that, but opening your mind
Speaker 1: to understand how you could. I love that. So for
Speaker 1: people that want to get into like traditional house talking
Speaker 1: like the duplex triplex type, where do you suggest they
Speaker 1: look to do this. I live in a city where
Speaker 1: real estate is pretty expensive right now as a first
Speaker 1: time home buyer, would that still be a good area
Speaker 1: for me? Or should I look outside of that? Or
Speaker 1: how would I go about determining the area. So yeah,
Speaker 1: I think the first thing you want to do is
Speaker 1: kind of pick what strategy you want to do. Are
Speaker 1: you okay with getting a duplex, triplex or quad or
Speaker 1: are you okay with a single family home? You know,
Speaker 1: typically places that are more expensive at this point typically
Speaker 1: are going to appreciate a lot more, which means you
Speaker 1: probably won't get as much cash flow, which I suggest
Speaker 1: if you're doing your first couple of house hacks, a
Speaker 1: couple of real estate investments, you should first purchase for
Speaker 1: cash flow and then once you're financially independent through the
Speaker 1: real estate and then you can start playing the equity
Speaker 1: and appreciation place. But to answer your question, I would say,
Speaker 1: what strategy do you want to do? If you want
Speaker 1: to do the traditional, then obviously need to do do plex,
Speaker 1: triplex or quality. But I would really say just try
Speaker 1: to be flexible and take what the market gives you,
Speaker 1: because you're not going to really force the market's hand. Okay, yeah, definitely. Now,
Speaker 1: of course you've got investors, real estate investors out there
Speaker 1: doing this to make money. What are some recommendations for
Speaker 1: just first time home buyers, maybe just getting their feet
Speaker 1: wet in house hacking, not necessarily trying to make this
Speaker 1: their business, but maybe more their side hustle or something
Speaker 1: to pay off their mortgage. What tips do you have
Speaker 1: for those folks. So many investors are going to go
Speaker 1: out there and they're going to try to undercut the seller, right,
Speaker 1: they want the best possible price in the house. When
Speaker 1: you're a house hacker, you have an advantage, and that
Speaker 1: is because you could literally buy the house at asking
Speaker 1: price and you will still be way better off than
Speaker 1: if you were to be renting or continuing in your
Speaker 1: current situation. An investor is gonna try to take grand off,
Speaker 1: but grand on your mortgage payment is really not that much.
Speaker 1: It might be like thirty or forty a month, So
Speaker 1: why don't you just let the seller keep his money,
Speaker 1: let the transaction go through. You can start that time
Speaker 1: because you need to live in the property for one
Speaker 1: year as the loan will stipulate, and then you your
Speaker 1: timer starts, and then twelve months after you close you
Speaker 1: can get your second one. And the longer you wait
Speaker 1: and the long and the more deals that you get
Speaker 1: denied from, the longer is gonna take for you to
Speaker 1: start actually building your wealth and actually purchasing real estate.
Speaker 1: So that's kind of the advantage is that you don't
Speaker 1: have to undercut and you don't need to you know,
Speaker 1: your margins aren't as whim as other investors are. Yeah,
Speaker 1: that's so interesting because when we were buying our house,
Speaker 1: we tried to find more of a fixer upper, but
Speaker 1: since the real estate market here was still hot, we
Speaker 1: were getting just cut out by real estate investors paying
Speaker 1: all cash. But the fact that if you're doing a
Speaker 1: house hack and you're living in it, you can actually
Speaker 1: afford to pay the seller a little more and they
Speaker 1: will definitely go with you over an investor for that,
Speaker 1: that's awesome for sure. For sure. Any specific words of
Speaker 1: wisdom or recommendations, I know that you have properties in
Speaker 1: different locations, At what point would you recommend somebody considering
Speaker 1: that option for themselves. It's really when you feel comfortable.
Speaker 1: Investing out of state is honestly like a whole different subject,
Speaker 1: you know, there's David Greene wrote a book on how
Speaker 1: to invest in long distance real estate or whatever. And
Speaker 1: really you just have to be comfortable building a team,
Speaker 1: be comfortable with an area, and really have hone in
Speaker 1: on your evaluation skills on property managers, on contractors, on
Speaker 1: agents and all those kind of things. And once you're
Speaker 1: comfortable with that, then I would recommend, hey, giving it
Speaker 1: a try, but I would recommend maybe getting a couple
Speaker 1: of house hacks under your belt, just because it's a
Speaker 1: great transition and it's much easier to house hack than
Speaker 1: it is to invest out of state. I know some
Speaker 1: people will get themselves into the situation accidentally, Like let's
Speaker 1: say they bought a house and then experience a job
Speaker 1: change and of difficulty selling it, so then they consider, yeah,
Speaker 1: what if I rent or airbnb? But they never really
Speaker 1: intended to have properties in different states. But luckily you
Speaker 1: can rent and still get some money for it. But
Speaker 1: definitely wisdom to try it first. Yeah, if that's the case,
Speaker 1: you just find a good property manager. You know, you
Speaker 1: don't really need a construction team and an agent and
Speaker 1: all that kind of stuff. You just you know, ask
Speaker 1: around and get on bigger pockets and ask people in
Speaker 1: your area if they have a property manager and see
Speaker 1: who they're using. Yeah, Craig. So if somebody is now
Speaker 1: really interested in house hacking, because like how couldn't you,
Speaker 1: but maybe their spouse knows nothing about it or is
Speaker 1: skeptical about it, Like, how would you get about getting
Speaker 1: your spouse or family on board? Yeah, this is always
Speaker 1: a fun question to answer. So if you're trying to
Speaker 1: get your spouse or family on board, I wouldn't try
Speaker 1: to do it all at once. I would definitely try
Speaker 1: to plant the seed, right, So plant the seed about
Speaker 1: real estate investing, plan the seat about house hacking. And
Speaker 1: then so we ease them into hey, this is what
Speaker 1: this is, this is what it could do for us.
Speaker 1: Show them the numbers, right, show them, Hey, you know,
Speaker 1: right now we're paying a month in housing. If we
Speaker 1: house hack, we can actually maybe make five hundred, six
Speaker 1: hundred dollars a month, and that's a two thousand dollars swing.
Speaker 1: If we can save all that over time, we'll be
Speaker 1: able to quit our jobs in just a few years
Speaker 1: and then do the things that we really love to
Speaker 1: do and spend time with family and travel and do whatever.
Speaker 1: I would definitely recommend not making it just like, hey,
Speaker 1: we can make a lot of money this way, but
Speaker 1: have some sort of emotional tie to it, and and
Speaker 1: tell them what house hacking will enable them to do
Speaker 1: with their lives, rather than just say, yeah, we can
Speaker 1: make like a hundred thousand dollars over the course of
Speaker 1: a year if we house hack, right, That's kind of
Speaker 1: would be my approach. But definitely make it a slow approach.
Speaker 1: Maybe show some some success stories of maybe some someone
Speaker 1: blogging or a podcast or whatever it is that people
Speaker 1: who are actually doing it. Maybe give them my book
Speaker 1: and you can see all the case studies in there
Speaker 1: that show all those success stories and how they're doing it. Yeah,
Speaker 1: just just slowly kind of introduce it. Yeah, Yeah, that's
Speaker 1: that's great advice and shared information and resources is usually
Speaker 1: a way to have good conversation, like you said, the book,
Speaker 1: the podcast and being able to get people on board
Speaker 1: that way rather than your own ability to debate. Right.
Speaker 1: But it's the same way you get somebody on board
Speaker 1: with paying off debt. From what it sounds like, it's
Speaker 1: just being persistent, consistent, but also backing off and being
Speaker 1: kind when you need to be, just being patient. Exactly.
Speaker 1: Great tips, Craig. You know what else is great the week.
Speaker 1: That's right, it's time for the best minute of your
Speaker 1: entire week. Maybe a baby was born and his name
Speaker 1: is William. Maybe you paid off your mortgage. Maybe your
Speaker 1: car died and you're happy to not have to pay
Speaker 1: that bill anymore. That build Buffalo bills, Bill Clinton, this
Speaker 1: is the bill of the week, Craig. Every week we
Speaker 1: invite either our listeners or our guests to share with
Speaker 1: us their favorite bill of the week, and it is
Speaker 1: our favorite time of the week, and we're excited to
Speaker 1: hear yours. Do you have one ready for us? Yeah?
Speaker 1: I do actually remember a schoolhouse rock and there's Bill,
Speaker 1: the guy who like sings a song about how to
Speaker 1: make it. I'm gonna I think he's probably my favorite
Speaker 1: Bill I've ever met. It's amazing that, yes, that you've
Speaker 1: ever met. I love how you feel as though you've
Speaker 1: met him just because you've you've watched the video. We're friends, right,
Speaker 1: It's just like you've watched SpongeBob and all those guys
Speaker 1: are they're there their childhood friends. Yes, SpongeBob is not
Speaker 1: my friend. I have always thought he was so annoying.
Speaker 1: You know, I'm so sorry. Before I would not have
Speaker 1: done the same year. He's popular with all the kids.
Speaker 1: And I guess maybe I was just on the cusp
Speaker 1: of being too old to enjoy SpongeBob, and that's why
Speaker 1: I just never got into it. I was like, this
Speaker 1: is dumb. Though, it's just so dumb. We do not
Speaker 1: get any smarter, Oh my gosh. No. Well, if you
Speaker 1: have a bill that makes you smarter, or maybe it
Speaker 1: doesn't make he's smarter, who cares? We won't and Judge
Speaker 1: submit it to us at Frugal Friends podcast dot com
Speaker 1: slash bill and we will play it on the podcast.
Speaker 1: We will laugh, and we never know what the bills
Speaker 1: are before we hear them live on the show, and
Speaker 1: so all of our reactions are genuine, just like just
Speaker 1: like my reaction to SpongeBob, it's genuine, authenticnest. We never
Speaker 1: make sofa you might. I hope you don't lose any
Speaker 1: listeners for that one. But we're just refining our audience, Craig.
Speaker 1: We're really looking for quality over quantity. Were started really refined.
Speaker 1: I can't even argue with that. I can't even Yeah. Well,
Speaker 1: that leads us into our second favorite time of the week,
Speaker 1: the Lightning Road, and it's as intense as ever, this
Speaker 1: is the Lightning Round, the round that is the same
Speaker 1: as the first half the show, but with a more
Speaker 1: catchy name. So and just as in annoying to your
Speaker 1: ear drums. People love it, Jill, They love it. So
Speaker 1: we're just going to ask you a few more questions
Speaker 1: with succinct or lengthy answers, you choose. We're we're not
Speaker 1: picking this is the Lightning Round, but the answers don't
Speaker 1: have to be short. So, Craig, what are the top
Speaker 1: expenses people should factor into their house hacks? So they're
Speaker 1: missing out there. They're avoiding the mortgage technically, but what
Speaker 1: expenses should they be prepared for? So there are always
Speaker 1: going to be a little bit of maintenance costs when
Speaker 1: you move in. You may not like something that you
Speaker 1: might want to change. The house will never be fit
Speaker 1: to your exact wanting, so you'll just you know, I
Speaker 1: would make sure you have a little bit of reserves
Speaker 1: for that. And there's always something that goes wrong to right,
Speaker 1: like you might have a leak that happens or whatever,
Speaker 1: and something's gonna go wrong over the course of the year,
Speaker 1: probably three or four times. To just make sure that
Speaker 1: you have some reserves set aside. You know, I mentioned
Speaker 1: in the book too that you always want to set
Speaker 1: aside a portion of the rent to quote unquote reserves,
Speaker 1: which is includes capital expenditures. Capital expenditures are like you
Speaker 1: need to replace the roof someday, so set aside a
Speaker 1: little bit of money each month for that maintenance is
Speaker 1: you know, the leaky faucet or those kind of things.
Speaker 1: And also vacancy is the big expense that doesn't actually
Speaker 1: come out of your paycheck or like you don't actually
Speaker 1: get money for it, but you're not getting money for
Speaker 1: when your place is not rented, so you always also
Speaker 1: have to be careful of that. Yeah. Yeah, what's your
Speaker 1: experience with tenants so far? How have you found so
Speaker 1: apart from Airbnb gas, what have more long term tenants been? Like? Yeah, so,
Speaker 1: most of them have been really good. The ones that
Speaker 1: I have screened and done minded diligence on have been wonderful.
Speaker 1: There have been two that I got greedy and very
Speaker 1: lazy on very recently, where I did not screen them properly.
Speaker 1: It was only a month to month lease that I
Speaker 1: let them on, and it ended up in the worst
Speaker 1: possible I guess that's the worst possible scenario, but one
Speaker 1: of the worst possible snarias that could have happened is
Speaker 1: exactly what happened. So basically what happened was I let
Speaker 1: these two people into my house in the basement, and
Speaker 1: they wanted to rent out the rooms as I was
Speaker 1: redoing my basement, and I said, oh, what the heck, Yeah,
Speaker 1: I'll take the extra money. I'll make way more than
Speaker 1: my mortgage during this interim time and it's only months monthly.
Speaker 1: So what's the worst that could happen. Well, my contractors
Speaker 1: were down there redoing the basement and they're ripping up
Speaker 1: the carpet by the hallways, and they smelled this atrocious smell.
Speaker 1: No one knew what it was. I asked them all
Speaker 1: these questions. They couldn't quite point a finger as to
Speaker 1: what the smell was. So I looked up both people
Speaker 1: and one of them was on our county's most wanted
Speaker 1: list for very hard drugs. So I expect that one
Speaker 1: of these people was doing either crack or myth or whatever.
Speaker 1: I don't know what those smell like, and I don't
Speaker 1: think they can actually pinpoint it. So I was like,
Speaker 1: oh crap, So now I've because I've been lazy, greedy
Speaker 1: and did not follow my own advice about screening your tenants. Here,
Speaker 1: I am. I just got cocky because it was my
Speaker 1: third deal and I can do all these good things now, right.
Speaker 1: My cockiness laziness cost me that. And so what I
Speaker 1: did was I just said, hey, you guys need to
Speaker 1: get out by the end of the week. I will
Speaker 1: give you your security deposit, give you your rent, and
Speaker 1: pay you five dollars to just get out. And they
Speaker 1: both took that offer and left within the week. So
Speaker 1: thank god, I got lucky that they just listened to
Speaker 1: my offer and took it. But if they did not,
Speaker 1: would have been much much worse. So yeah, seriously, do
Speaker 1: not take any shortcuts on screening tenants. That is a
Speaker 1: lesson I learned there. All right, Wow, good word to
Speaker 1: the wise. Thank you. Yes. Um, So, now that you
Speaker 1: have a few house hacks under your belt, what did
Speaker 1: you do after that? Like what came next? Well, I
Speaker 1: guess I still am house hacking, so nothing has officially
Speaker 1: come next yet, but what I plan to have come next? Obviously,
Speaker 1: you know I've written the book on house hacking. That
Speaker 1: was pretty big. Um, I'm going to start doing a
Speaker 1: little bit more real estate investing, but not house hacking.
Speaker 1: Do a thing called the Burr strategy, which, if your
Speaker 1: listeners don't know, is you buy a property, you rehab it,
Speaker 1: you rent it. Because the rehab increases the value, you
Speaker 1: can refinance it, pull all of your money out, and
Speaker 1: then you can just take that money that you pulled
Speaker 1: out and repeat and just build your portfolio that way.
Speaker 1: So I plan to do a little bit more of
Speaker 1: those in the future. And yeah, and I hope you know.
Speaker 1: I think I've officially hit the financial independence point. So
Speaker 1: I'm really gonna work for another year or so because
Speaker 1: I do love my job here at Bigger Pockets, But
Speaker 1: then I'll probably travel for a little bit and kind
Speaker 1: of figure some stuff out. So awesome, where do you
Speaker 1: want to travel too? I just want to take a
Speaker 1: couple of years and just go around the world. I
Speaker 1: don't really want to have a plan, just pop on
Speaker 1: a bus and kind of go wherever. And yeah, just
Speaker 1: kind of be a free spirit for a little while,
Speaker 1: basically backpacking. Yeah exactly, I've done some backpacking before, so yeah,
Speaker 1: it'll be really fun. I enjoy it, oh for sure. Yeah,
Speaker 1: I'll probably have, you know, my own blog and might
Speaker 1: even have my own podcasts and stuff at the time
Speaker 1: as well, just to just to learn, just you know,
Speaker 1: so I can. I feel like I need to be
Speaker 1: contributing in some way, even if I am on vacation
Speaker 1: for two years, so that always working. Yeah, you're a
Speaker 1: person of such high capacity. There's no way you wouldn't
Speaker 1: want to put your hands to something while you're enjoying yourself. Yeah, exactly, awesome, Craig.
Speaker 1: Where can people learn more about you and get your
Speaker 1: book and dive deeper into this house hacking content. Yeah,
Speaker 1: so you can get the book at Bigger pockets dot
Speaker 1: com slash house hack, and if you want to follow
Speaker 1: me or be friends with me, you can follow me
Speaker 1: on Instagram. I'm at the five guy. All right, Well,
Speaker 1: thanks so much for coming on the show, Craig. Um.
Speaker 1: I hope this inspires a lot of our listeners to
Speaker 1: explore house hacking and looking at ways they can monetize
Speaker 1: where they live or where they will live in the future.
Speaker 1: I also hope they get your book to learn how
Speaker 1: to do it. The book is The house Hacking Strategy.
Speaker 1: It's really real good, real good. That was so great. Yeah,
Speaker 1: I am very excited to do this myself. We are
Speaker 1: still in a camper, So as much as I say,
Speaker 1: you know what, stop all your excuses, share your space
Speaker 1: with other people and make money. That is really not
Speaker 1: possible in seventies square feet, but you are sharing your
Speaker 1: space like with your spouse, like all of the space
Speaker 1: is shared, and that is helping us towards our financial goals.
Speaker 1: So it's a different version of house hacking. But we
Speaker 1: do have our site set on purchasing property in the
Speaker 1: next couple of years and really excited to be able
Speaker 1: to do this house hacking thing in some capacity. So
Speaker 1: really glad to have had the info ahead of time
Speaker 1: from Craig and all the good tips he brings. Yeah,
Speaker 1: and I have enjoyed our past almost two years now
Speaker 1: renting out our front room on Airbnb, and it was
Speaker 1: something that really made us good money for a good
Speaker 1: year and a half and it was never something we
Speaker 1: planned to do forever but until we had kids, and
Speaker 1: so now that we have kai, we do it very loosely,
Speaker 1: so I block out days very liberally and just do
Speaker 1: what works for me. And I'm still getting an extra
Speaker 1: two to six dollars a month just for opening up
Speaker 1: the front room of my house. So it's very little
Speaker 1: effort but a big return, and that is really the
Speaker 1: essence of frugality, you know, if we're being honest. Yeah,
Speaker 1: you've done so well with airbnb. Yeah, there's so many
Speaker 1: ways to get creative. And I love what you said
Speaker 1: during the interview of just being resourceful. Such a good
Speaker 1: word to describe frugality. Yeah. I talked about that in
Speaker 1: my book that's coming out in just several several weeks now. Geez,
Speaker 1: so many books to read. I know, I know, I
Speaker 1: got a budge of my time, I know. But for
Speaker 1: this month, we are reading remat said He's second edition
Speaker 1: of I Will Teach You to Be Rich. I just
Speaker 1: I finished this on audio book this summer. It is
Speaker 1: so fantastic, and so I'm excited for this month's book
Speaker 1: club book awesome. And if you want a free copy
Speaker 1: of this book, I Will Teach You to Be Rich,
Speaker 1: leave a copy for Nope, if you want to pass copy,
Speaker 1: just keep copying and copy that. Uh. Leave us a
Speaker 1: review on iTunes or Stitcher. Screenshot that review and email
Speaker 1: it to us at Frugal Friends Podcasts at gmail dot com.
Speaker 1: We select one winner for every five reviews that are
Speaker 1: submitted to us, So chances are real good that you
Speaker 1: get a book in the mail to you foe free.
Speaker 1: And if you want an example of a really great review,
Speaker 1: we always need examples, here is one. It is very excitable,
Speaker 1: very excitable Jess, and she gives us five stars and says, yes, yes, yes,
Speaker 1: how have I just found this podcast? I feel like
Speaker 1: these girls are the frugal friends I've been looking for.
Speaker 1: I r L. Not that I don't already have a few.
Speaker 1: I really appreciate their practical tips, and I'm excited to
Speaker 1: try the cook at Home Challenge, which we just ended. Yes,
Speaker 1: I love how listening to this podcast is like having
Speaker 1: a light but insightful conversation with good friends who understand
Speaker 1: frugality and what is truly important. Loving this content and
Speaker 1: can't wait for the next episode, Jess, Yes, yes, yes,
Speaker 1: that's all I can say to this review. Yes, yes, yes,
Speaker 1: we are yessing with you in real life. Yes, well
Speaker 1: that's a great review, um, but don't let that hinder
Speaker 1: you from writing your own good review with your personality
Speaker 1: sprinkled all through it. It can be no, no, no,
Speaker 1: as long as it's five stars. So, but how silly
Speaker 1: would that be if you let a horrible review. No no,
Speaker 1: no doesn't have to be a horrible review. They could
Speaker 1: tie it in and make it a good review. I
Speaker 1: don't know that's that's really but maybe it. Try Try
Speaker 1: it with challenge for the week. Tell me how it goes.
Speaker 1: In the meantime, join us over on our Frugal Friends
Speaker 1: community group on Facebook. Chat with us there, read the
Speaker 1: book save some Money? How is hack? We don't care,
Speaker 1: but we'll see you next week. Frugal Friends is produced,
Speaker 1: edited and mixed by Eric Syria. How would the no
Speaker 1: no no review go? No, no no, I don't want
Speaker 1: to listen to anything else but the Frugal Friends podcast
Speaker 1: Spending impulsively, having too much, spending too much? Love the
Speaker 1: frugal Friends who helped me figure out how not to
Speaker 1: spend impulsively. No no, no debts, No no no. I
Speaker 1: love this podcast. I don't think that's how it would go.
Speaker 1: No no, no, no no. I'm so bummed that the
Speaker 1: episodes are over until next week. No no no, Oops,
Speaker 1: that was a type. Oh love this podcast? It too
Speaker 1: lazy to go change? Oh yeah, we Apparently there's so
Speaker 1: many options to use that as a as a review title.
Speaker 1: It might throw a few paint off, but the five
Speaker 1: stars is what really gets people. So yeah, and if
Speaker 1: they're confused, then they're in the right place. They can
Speaker 1: they can hang out with us because we're confused a
Speaker 1: lot too. Oh goodness, I don't know if I want
Speaker 1: to lead with that, but that's why it's at the
Speaker 1: end of the episode. If everyone's hanging out to this
Speaker 1: at this point of the episode, they get it.