Success Stories: Meet Jeremy -- a 2-Time House Hacker in Northern NJ
Jeremy, you are in your mid 20s and already the proud owner of two different 2-family properties in Northern NJ, which you've acquired over just a 2-year period. This is an incredible achievement at such a young age. I think a lot of aspiring "house hackers" could benefit from your experience and honest feedback, so I want to thank you for taking the time to come up with these thoughtful responses to the questions I posed to you.
1. What advice would you give to other young aspiring house hackers looking to get started?
There is so much I can share here, but I’ll start with a few points I think are most important:
- Get in the right mindset and educate yourself through reading books, becoming active in online forums (like BiggerPockets!), networking with other people who are already in real estate and asking the right questions. If you have the right mindset and have done your due diligence by educating yourself, I can assure you that you can get any deal done.
- Track your finances. I’m sure you’ll see this everywhere because it’s true! If you do not know how much money is coming in and coming out each month, how do you expect to know if you could afford a mortgage let alone other costs of owning a home?
- Make sure you have a great support system. Mine were my agent (Max!), my girlfriend and my parents. Max helped reassure and validate my thinking while also giving his honest opinions. My girlfriend helped calm my nervousness and anxieties through the home buying process. My parents helped keep a positive attitude. Having a support system is essential.
2. What idea or goal launched you onto your REI journey? Why was that important to you?
I was just about a year into my 2nd ever office job out of college and finishing my MBA program. I was sitting at my desk in the afternoon miserable because of the thought of having to do this for the rest of my life. Mind you, I was 23 years old at the time. That meant at least another 40 years of sitting at a desk! These thoughts prompted me to research what I can do to get out of the 9AM-5PM life and that’s when I came across real estate investing and BiggerPockets. That moment was so important because it lit a fire in me so bright that I bought my first house hack 6 months later.
3. What made you the most excited about buying your first property?
Moving in with my significant other (been together 6 years, decided it was finally time to live together). I’m not saying this to get some brownie points, I was truly excited!
And actually going through with it! I had a lot of doubts especially at the time in 2019 when the real estate market was heating up and it was 5 months before the current COVID-19 global pandemic started.
4. What made you the most nervous?
A lot of things. I was a huge ball filled with anxiety. The inspection, getting approved for the mortgage, and just making sure we close on the house gave me so much anxiety throughout the whole process.
5. How has the reality of property ownership compared to your perceptions or expectations?
Going into real estate initially, I really thought it was going to be a walk in the park. Find the house, buy it, fix it up, rent it and go to sleep. That could be the case if you have a property manager. As a house-hacker, you have to worry about the tenants and your personal space.
6. What fear do you think is the most overblown?
I think the fear of being a landlord that is constantly dealing with tenant issues is one of the most overblown fears. If you do things the right way, treat people the right way and put systems in place, being a landlord is one of the easiest jobs you could have.
7. What actual risk or issue do you think is not talked about enough?
When applying for a mortgage, your gross income is taken into account not your net income. It gives a false perception that you are able to afford x amount of dollars per month on a mortgage because you make x gross amount of dollars but when in reality you make less than that because of taxes, health insurance, 401k contributions,, etc.
I just believe it’s a false perception of being able to afford a mortgage. I understand we have to do our due diligence but why even factor in monthly gross income in the first place if that amount is not what you take each month? Just my two cents!
8. How has being a landlord compared to the "myths" about landlording? What's been the biggest surprise on the upside and downside?
There are a lot of overblown myths about landlords. There are always a lot of bad apples in every business, landlords are no exception especially since they have nicknames such as slumlords. Biggest positive surprise has been how much you learn about what it takes to maintain a home. Biggest negative surprise: Spending money on unexpected repairs
9. If you could go back 2 years to the start of your REI journey, what would you do differently, if anything?
It’s tough to say because if I change something would I be the person I am today? If I were to change anything it would probably be to find a house hack with optimal space in both units. My girlfriend and I lived in a 450 sq.ft., one bedroom/one bathroom apartment on the 2nd floor during the pandemic, until we moved to the next “house hack”. It did teach us a valuable lesson in minimalism and understanding we need more space to thrive.
10. What's next for you?
Get rid of some credit card debt, renovate our basement, and rebuild emergency funds in the short term. We used 0% APR credit cards to finance a lot of our renovations so we’re looking to clear out our debts and get our credit scores back in order!
Longer term -- 5+ years: Build capital for a new apartment building project with my immediate family.
Bonus Question: How many midnight calls have you gotten in nearly 2 years of being a landlord about a clogged toilet (or any other issue for that matter)?
No lie: One week after my first tenants moved in, there was an issue with the basement toilet flushing slowly. Fortunately this was a 6PM text and not a midnight call. Nothing like the good old plunger and some environmentally friendly drain cleaner to fix it! As far as actual midnight calls, I’ve never gotten one. Knock on wood!
Jeremy, thanks so much for these candid and helpful responses. If readers want to get in touch with you directly, what's the best way for them to do that?
The best ways to reach Jeremy D. are:
Instagram & Twitter - thewhiteweeway
website: thewhiteteeway.com
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