2 Rental Properties by 22 and SERIOUS Cash Flow by Renting Rooms

every real estate investor has different properties a different portfolio and a different strategy around that portfolio one thing that we do have in common is that we got started today I'm joined with Alejandra Yun who got started at a very young age and actually has two properties at the age of 22 yeah that's right the age of 22 so we thought Alejandra we need to pull back the curtain and figure out how you got started today I'm joined with my good friend Alejandro Alejandra how we doing today I'm doing wonderful thanks so much for asking it's an honor to be here well Alejandra like I said getting started at the age of 22 is no feat that we can just turn away from this is something we really want to hear about so I just want to pull back the curtain and just hear your story from day one how did you get started in real estate yeah so it goes pretty far back my great grandma immigrated from uh Korea to Hawaii back in 1914 and uh she initially had a toy store which was successful and started developing Apartments way back in the 60s so out of my entire family she was the most successful businesswoman by far she ended up paying for her children grandchildren and great-grandchildren tuitions for college that was a heavy thing that she wanted to really promote was education so as a kid I'd seen her you know always talking about real estate going to her commercial properties and looking at the tenants and any improvements whatsoever so when I turned 18 my dad was pressuring me heavily to get my license when I was 19 I actually got it and started working at a property management company and it was just up from there amazing so at the age of 18 you know you're getting pushed to go find your license I'm sure a lot of 18-year-olds are you know thinking about college tuition at that age instead so tell me about at 18 what you were thinking at that time you know you saw your family members have really great success you've seen the financial benefits of paying down your college tuition through real estate okay what's going to be my my first thing with real estate am I going to get into sales am I going to try to be an investor like my family members can you tell me what you were thinking at that time to to get your intro to crack into real estate initially you know I was too young to really be in any sort of sales position I uh instead found a guy on Craigslist to just be his assistant for as a property manager I helped him manage 192 units in Austin Texas mostly consisting of rent by the room so he had like 15 houses where he would just rent out each room but I learned a ton I was it was a three-person army at that time I was working for 40 50 hours a week and it was really just a heavy crash course as to um you know how to deal with pendants setting up leases the basic accounting and in that entire time I was also getting my license wow so it sounds like you were wearing almost every hat at that time my intro was actually in Property Management as well and mine was uh being a leasing manager and I found that really beneficial because it it helped me really understand the the rental market and get me you know some rental rates some comps for the area when I was starting to think about investing what were you doing at that time for the property manager I know being on a three-person team it certainly is you know I'm potentially working with contractors I'm working with the tenants I am the lead property manager can you tell me what you were doing for the property manager at that time to to really cut your teeth and and learn the trades a little bit Yeah so initially I was only doing showings he would give me like a sheet of just like 10 showings to go to in that day I would just go back and forth I would do three showings at a time so be three guys coming at me explaining them the the rates the uh contract the length of stay all that sort of stuff slowly started giving me more and more responsibilities I started uh dealing with the marketing which is posting on Craigslist Facebook all these websites are just fine tenants later on I got uh to the QuickBooks and accounting side and at one point his uh wife went to labor for their child and I ended up taking over her side which was all the accounting for around a month and a half thank God that was in the summer cuz I would have been toast there's no ways I could have handled that workload uh during the school year absolutely so at that time it sounds like you were a senior or a junior in high school I started with him when I was a sophomore I quit his job when I was a junior in uh College actually I started college very young and I really left him more so right after I got my license cuz I assumed and it felt right that I could actually pursue a higher paying job this entire time I was baking like 16 17 an hour so it wasn't the highest pay but the experience was worth so much to me okay wow so you were a well in the summer you were still a full-time student you were working full-time and then also studying to get your license so can you tell me how you balanced um you know studying for your license at that time because you know 40 to 50 hours a week already in Property Management working in real estate I know it's really tough to go home after all that and say let me go study a little bit more about real estate so tell me how you balanced that work life a little bit during that time you know being a full-time student a full-time worker and then studying for another another project here with your license so full disclosure my grades weren't the best in college I you know passed well but I wouldn't say I definitely did not go the extra mile and honestly at that time I was so obsessed with Bigger Pockets too I was listening to every single podcast every single day I honestly don't even think I needed a study I was just listening all the time every hour of every day was into real estate so you're in the grind obviously learning the trades you're studying full-time as a college student working full-time as a a property manager now you've you know you've seen some of the properties in your area some of the mistakes that landlords are making tell me how that got your intro into being an investor then did you you know start to look at what they were doing from the property management side and say ah this is not the right way to do it and I can run this property the right way or how did you go about becoming an investor after uh all these things that you've done in your personal life I felt I could 100% run my rent by the rooms much better than he did so I was living in Austin going to college in Austin so when I graduated I was able to use my salary and offer letter to qualify for a traditional conventional mortgage being that I was in college in Austin it was way too unaffordable at the time I decided to move to Houston only because I could house hack there and afford to do it Houston is a significantly cheaper Market than Austin if you're not aware with that I was able to pick up a four bed 2 and a half bath with 3 and 1/2% down with a 62% rate so it was a bit high and I still think I probably could have done a little bit better but I was so hungry at that time and I just really want to start building some Equity the most common thing that I'd probably like to say that I'm a broken record is time in the game not timing the game so I know that you're going to have a lot of opportunity just just having the equity and the skin in the game at this time so you're absolutely doing the right things my friend tell me a little bit about how you found that deal I know it's uh primary residence you definitely used the conventional loow down payment on on a loan there and it sounds like you're going to be house hacking this property is is that accurate and if if that is true tell me what you were looking for at that time to to to get your numbers right for a house hack yeah so of course with any house hack I wanted to just look to see if I could just lower my payment to be less than rent I was get a slam dunk since the prices were so low there initially it was a four bed and I was able to live in the master bedroom and rent out the other three at that point I was spending only $400 a month in rent or in the mortgage out of my pocket later this is I got this from Craig kop with his book I was able to get a roommate in my room so my master bedroom was split and I built a room in the home it was a 2400t home I paid a contractor $1,000 to put up some Ry wall and installation right after that I was able to cash flow while living there around 200 bucks I consider a huge success and that was able to really just snowball my savings and get the second property okay so you've got your first property running by room took a lot of great tips from Craig kop in the in the house hackers book on how to you know split it up and get even more cash flows so taking that cash flow into the next property can tell me what you were looking for at that time and what you found so I'm very active in the forums I'm Bigger Pockets I got very lucky I found my alumni from my college he's around 20 years older than me and he had bought some 8 homes during the co boom with that he had a lot of adjustable rate mortgages and had to sell some of his properties rat just kept going up I was able to get him at a good time he needed cash like that week and I closed on a property within a week I got a great deal on it for a few reasons it was a bit beat up and there's also a terrible incident that occurred in it a few years prior that he disclosed to me so it like had a bad reputation in the neighborhood obviously that didn't really affect the rents that much for it at all but uh you know I'll have to stick with that as I hold it for a few years before things slowly become better that's really crazy to hear because I'm in Colorado and in my market with the state regulations you're not allowed to actually disclose when there is like a negative connotation or a problem with the property we often see that there's a haunted house and you can't disclose that it's haunted and it it has a negative connotation and actually decreases the value of the property so it's interesting to hear in Texas that you are allowed to disclose these things and it it actually does deteriorate some sellers and buyers from the property and it gives you the opportunity Alejandra to to get in there and and buy the property which which you did so it's it's amazing to hear that tell me about what those numbers look like on the second property then so you know you had a little bit of a headache it sounds like to get over the hump of yes this was a distressed property in an area that could have been a little bit tougher but what do the numbers look like today are is it cash flowing are you able to do the work on it to get the numbers up right or are you are you taking a little bit of a hit on this one yeah so um because I was able to get seller finance I took over his old loan which was a fixed rate 4.3% loan he had a $270,000 left on the mortgage I put 40,000 down so my overall cost is 310,000 that is pretty much exactly what homes were selling for in that area on top of this there was no Bank going over my finances and I had definitely not passed the one-ear seasoning period between buying a second home so you know it was a slam dunk my mortgage at that time was $2,200 utilities is a $ few hundred and I rented out by the room again and make around $3,050 so my cash flow roughly is around 500 as well for that one just like the one in Houston so this one was actually a lot more TurnKey the only other issue I had outside of the reputation was rats there was like a rat infestation I found a big hole behind the stove there rats everywhere so I had to pay a few hundred for that and there was also an expired permit for the property prior to the incident the permit was never closed and I had a deal with the inspectors coming by and continuously finding I also found out that the prior owner was still in litigation to figure it out I ended paying around $800 just to get them to go away really makes you you know think about doing not that you didn't do your due diligence up front but it just makes you think about areas that I potentially missed on on property one or two and you know I'm I'm a rookie myself I've only got two properties but I can clearly see a lot of the mistakes I on property number one how I Grew From number two and you know those mistakes I won't make again on property number three so it is nice to hear that those aren't high dollar things going out for you know liabilities on your end yeah pray pray there of course let's speed it up to today I know that you know you found some really great success here on on the rent by room strategy not only taking it from Bigger Pockets in their education but also working full-time as a property manager and and and you know living that firsthand and seeing the success of it so tell me today Alejandra what what does your portfolio look like now and are you looking for more opportunities this year around the rent by room house heck are you looking elsewhere in 2024 so if you could just tell me about your portfolio today and some of the some of the things that you're looking out for in the near future I'm cash bling well in both houses very grateful I'm not really too interested into buying another residential property right now I'm really going to be looking for something four units and higher and saving pretty aggressively for the next year to buy it I have sacrificed pretty heavily the past two years I'm definitely going to be splurging a little bit and I'm getting a decently new car I've been driving my old Volvo with a missing bumper for a long time time you know it's time to live a little so uh four units in hire is definitely going to be what I'm looking for in the next year year and a half and typically they require a little bit more money down so I'm really just going to be hammering for that nice so definitely seasoning the two properties you have you know taking a little bit off the throttle it's really great to hear that from somebody that has found success and is like okay my personal life I need to focus on a little bit more which is you know it's really admirable so thinking about that four unit are you going to look for a house heck are you going to look for partners are you going to look potentially you know joint venture or just be a limited partner on it and just look for passive income are you are you looking to get a little bit more passive in your uh Ventures moving forward no I love being as Hands-On as possible I will say I probably will look for partners in the cash side just because I know that in order to really grow and start to have a really big brolio you pretty much need to have cash Partners not one person's made of money and we all need to work together to get some big deals done so the next deal I do plan on maybe having some smaller cash partners and slowly as I get used to it just like any growing pain expand more and more and more you know this next de I don't think will be more than five at all but eventually it is my dream to eventually do 100 200 300 unit apartments and maybe some big retail stuff I know a lot of people are still thinking at your age how do I get started you know I I think this is almost impossible for me to do can you tell us you know your one your one Golden Nugget of advice if I was looking to go and buy my my first rental property today what what would you go and tell that person to go and start doing to create habits to to start look for that property I would definitely say it just takes initiative you just have to be willing to pick up the phone and call people and make sure that you can get things done a lot of people say that they want to try things I've thought about it but they don't actually get anything done that is by far the biggest thing that I just see a lot of people miss out on you know the opportunity is there it's just waiting for you to find it and to take it so definitely is going to be just picking up the phone calling people just networking you know this entire process my two properties I had five six people involved to get them it wasn't just like I did everything myself you know you need other people to get things done and the best way to do is just to take the urgency to start getting it done now it's amazing advice taking action is certainly the the number one thing that you need to do and after you take the action you need to you need to find the right team members to point you in the right direction and I know you and I can both speak on that firsthand at our age that we've had really great professionals point us in the right direction and thanks to Bigger Pockets resources we've found those professionals so Alejandra I I really can't thank you enough for all your time here today and for you you know sharing that you've had really great success at such a young age with with your two properties here down in Texas if our uh our audience is looking to connect with you where where can they find you my LinkedIn is my name Ro Yun my Instagram is my name Alejandro do Yun if you just look up my name I got a pretty funky name you'll find me pretty much anywhere I'd love to meet all you guys one thing that I find really cool is just helping people and seeing their progress you know I think anybody could do what I've done it's not impossible well amazing advice if you want to connect with me please head over to the Bigger Pockets forums or you can find me on Instagram at Mak bacon REI if you like this video please give it a thumbs up and please subscribe to the Bigger Pockets YouTube rookie Channel if you want to hear more stories like alejandr on how to get started please follow our Channel and you have have a great day [Music] [Music]

Channel: Real Estate Rookie

Views: 1,471

Keywords: rental properties, rental property, real estate, real estate investing, house hacking, rent by the room, investment property, income property, cash flow rentals, rental property cash flow, house hack, what is house hacking, how to invest in real estate, how to start investing in real estate, start investing in real estate, how to buy your first rental property, how to retire in your 20s, retire in your 20s, financial freedom, passive income, FIRE, biggerpockets, noah bacon

Id: PWSNwQUqzIE

Length: 13min 50sec (830 seconds)

Published: Tue Apr 30 2024