Little by little - one step at a time house hacking

[Max T.]

Age 23 - bought a duplex for 210,000. Put 10% down with a conventional loan. Monthly payments at $1200/mo. Lived in the small unit and rented the other for $950 (raised to $1050 3 yrs later).

Age 25 - brought in two partners and bought another duplex, this one for $180,000. My share is 50%. Monthly payments around $1000 and total rents around $1750. We put 25% down on that one.

Age 26 - Used an FHA mortgage to buy a single family 2 bedroom home. Also purchased the build able lot next door. Put 5% down on a total cost of 170,000. Spent about 20k on the rehab. Rents for $1365 and monthly payments are just under $1200. This one is killing me with the PMI/MPI, but the real money comes when I build a new home on the lot and sell for $325,000.

Age 28 - Banks wont lend to me anymore (debt to income ratio no good) so in my wife's name bought another 2br single family for 115,000. Put 20% down and did 25k worth of renovations. Basically renovated the whole house. We live there and monthly payment is around $700. This allowed us to move out of the first duplex, so now both units there are rented for a total of $2100. That duplex now pays for the mortgage on the new home and then some extra.

We are both teachers so I am able to do these rehabs in my summers off while still collecting checks from school. With the rental income I can easily save over 1000 every month and use that for the next project. Eventually I would like to get out of teaching and do this full time.

Developed a relationship with some cash investors this year. Found them two properties so far. When they get one that I find them, I get 5% equity for my services. I am also paid 8% of the rents in exchange for managing it. Hopefully I will find them a good flip opportunity soon and start seeing some real money from it. Add it to the pot and save up for the next deal of my own!