58) Buy a Small Multi Already & Also House Hack

Real Estate Investing with House Money

House Money Weekly

In this week’s House Money Weekly segment, Lauren and Alan together with Mandy discuss blog 152 - What Do A, B, And C Asset Classes Mean in Real Estate? Alan finds that understanding the classes you're investing in helps you communicate with other real estate investors. Alan clarifies that an asset class does not reflect the tenant base. Second, it is simply a quick scorecard based on the property's location and condition. During their conversation, Lauren asks Alan and Mandy if they have ever been surprised when they inspected a property and found it different from how it was advertised. Mandy makes a “catfish” joke, then shares her understanding of A, B, C, and D assets. Asset Class A represents properties in the best locations and conditions, while Asset Class C and D denote those in the worst locations. Asset Class B encompasses properties that fall between these extremes. An important reminder from Alan is that just because you purchase an A-class property doesn't guarantee it will remain as such. Regarding choosing an asset class, Mandy advises knowing your goals. Lauren suggests purchasing a small multifamily property and house-hacking it, likening it to training wheels for becoming a landlord. Alan prefers to renovate to “level up” the asset class of the property.

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Real Estate Is Easy Segment

Lauren interviews Bryce Garcia. He is currently house hacking, and out of the house hack, he runs a dog sitting business with his partner, where the dogs are their roommates! Additionally, he manages two other short-term rentals. Along the way, he started writing online about his short-term rental experiences, which deepened his interest in writing. This led him to invest in learning copywriting and ghostwriting. Bryce has been able to assist many real estate investors, whether through ghostwriting or consulting on digital marketing and lead generation from platforms like X or LinkedIn. Bryce also shares his backstory, which led him to real estate. One of his properties is performing well while the other is not. His short-term rental property in Myrtle Beach is particularly successful, having been very profitable this year with a cash-on-cash return between 15% and 20%. His other property is a condo in Austin that he originally house hacked, which started out well. However, the rise in short-term rental supply in the area led to breaking even the following year. Now, he faces a $36,000 assessment from the HOA. Bryce highly advises against buying in an HOA. Lauren asked Bryce why he chose real estate investing and what he likes about it. Bryce sees real estate as a combination of everything he loves. The potential for cash flow and the opportunity to build businesses around it caught his attention. Lastly, Bryce makes real estate easy by surrounding himself with people who are into it. This has been significant for him, as none of his friends or even his parents were into real estate investing. When he moved to Austin and met real estate investors, Bryce found that real estate investing became more accessible. Alan is a huge fan of meeting people in person, or at least on video or by phone. Mandy believes that you are the average of the 5 people closest to you, and that’s why she agrees with Bryce.

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Guest Host Segment

Guest Host Mandy shares that small multi-family properties are the very fastest way to reach financial freedom. Mandy recommends starting with house hacking. Alan agrees that is the safest way and the fastest way to build wealth. They take a little side quest to discuss books before diving back in. This is advice from Alan: if you're pre-qualified for a $200,000 single family house, you're probably qualified with the same amount of money and same down payment as a million-dollar quadruplex. Alan thinks this is the safer approach: if you lose your job, you still have some people paying your mortgage for you. You become a millionaire by waiting. Mandy agrees that scale is safer. Mandy's reminder to the people she meets when it comes to buying small multi is it is not harder, it's just more. And you have access to people who give you more time.

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