Episode 78: House hacking his way to become financially free at 27!
In today’s show, Pancham interviews Jonathan Farber – a side hustle investor who specializes in house hacking, the youngest enterprise account executive of NetApp, and the host of The Millennial Millionaire through Real Estate Podcast.
Ever wondered how people can pay you just by living in your own place? Well, it’s called house hacking and Jonathan is no stranger to this strategy. He has been house hacking his properties and is using his income to buy other properties.
With his skills and other financing strategies, he has acquired 4 single families and a 4-unit property and has achieved financial independence at the age of 27!
In today’s episode, Jonathan will share his journey to financial freedom. He will share how he got started with house hacking, the lessons he learned, and different advice so you can also achieve your investing goals through house hacking.
If you’re looking to actively invest in house hacking, this episode will surely guide you through!
Tune in to this show and enjoy!
- 1:51 – Pancham welcomes Jonathan to the show
- 2:44 – How house hacking made him financially free
- 9:30 – From spending to earning $300 monthly with his first house hack
- 14:15 – Different investments when he got into real estate investing
- 16:49 – His hustles of house hacking his 4-unit property (and the breakdown of his numbers)
- 23:18 – Optimizing COVID-19 as an opportunity to learn
- 27:31 – Starting his day with good energy and journalizing
- 31:28 – Taking the Leap Round
- 31:28 – His first investment outside Wall Street
- 31:48 – How he overcame his pessimistic mindset
- 32:26 – One investment that didn’t work out
- 34:14 – Why investors should follow “one logic of thinking”
- 35:35 – Jonathan’s contact information
3 Key Points:
- Why house hacking is the perfect active investment
- Various tips to get started in house hacking
- Why you shouldn’t put your life on pause amidst COVID-19
Get in Touch:
- The Millennial Millionaire through Real Estate Podcast – https://open.spotify.com/show/3VxyqVyRN86OA3GMIwMBr2?si=MSwLCFpYSxeiLVBkV2FHxg
- The Millennial Millionaire through Real Estate Podcast Facebook Group – https://www.facebook.com/groups/860025821084224/?ref=bookmarks
- Jonathan Farber Email – firstname.lastname@example.org
- Jonathan Farber Instagram – https://www.instagram.com/jonjfarb/
- The Gold Collar Investing Banking – https://thegoldcollarinvestorbanking.com/bankingshow
- Pancham Gupta Email – email@example.com
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki – https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194
Welcome to The Gold Collar Investor Podcast with your host, Pancham Gupta. This podcast is dedicated to helping high-paid professionals to break out of Wall Street investments and create multiple income streams. Here is your host, Pancham Gupta.
Hi, this is Joe Fairless. If you wanna diversify out of Wall Street investments, then listen to The Gold Collar Investor Podcast.
Hey, this is Mauricio Rauld, founder and CEO of Premier Law Group and if you are serious about investing in real estate, listen to The Gold Collar Investor podcast with Pancham Gupta.
Robert: Hi, there. I’m Robert Helms, host of The Real Estate Guys Radio Program and if you want to have better results in your life, you gotta put better ideas in your mind. You’re in the right place here at The Gold Collar Investor Podcast.
Pancham: Welcome to The Gold Collar Investor podcast. This is your host, Pancham. Thank you for tuning in today. Let’s get into today’s show. How do you like someone paying you for living in your own apartment or house? What if you are able to use the money that you pay for rent or mortgage towards your investing goals? Yes, it’s possible but takes a certain kind of mindset to get there. As they say, hindsight is 20/20 when I look back into my investing career, if there is one thing that I regret the most that is my first investment. I should have done a house hack. Now what is a house hack? It is like living in one unit and/or one bedroom of a property and renting out other units or bedrooms. This way you can live for free and in fact you can even get paid for living in your own house or apartment. If someone ask me today what is the best first active investment? I tell them do a house hack. My guest today Jonathan Farber is no stranger to this strategy. In fact, he has become financially free at the young age of 27 by using this strategy alone couple of times. Jonathan, welcome to the show man.
Jonathan: Thank you for having me Pancham. I am truly excited to be here.
Pancham: I’m so looking forward to this show because what we are going to talk about today is something that I talk about so many times with so many different people. I get this question a lot. Hey, I’m thinking of getting started, how do I start? My answer to that question has always been that if you’re looking to actively invest, do a house hack and then the next question I get is what is a house hack and that’s exactly what we are going to discuss today. So, before we get into that, are you ready to fire up my listeners breakout of Wall Street investments?
Jonathan: I am so ready, man. I might need to take a walk after this episode. I’m not ready. If you are, I am, okay?
Pancham: Yeah, absolutely, so looking forward to it. So, you know, before we get into any of the house hack and stuff, why don’t you tell our listeners about your background and the person behind that background?
Jonathan: Okay, yeah, and I’ve a little extra background. First, we are just talking about my life in weeks. If that says anything about me, I wanna try to do a lot in this short glimpse of time that I think we all come onto the earth for. So anyway, quick blurb back into me, I’m 27, I’m moving around a little bit now but originally from Long Island, New York. I did not grow up thinking about real estate. I did not grow up thinking about business. I was not business oriented when I was growing up. I was more or less just go with the flow and have fun and then I was exposed to golf through a very strange circumstance when I was 14 and I’d say that kinda gave me the focus in life to go after something and it was the first time I set a goal I was able to achieve it which was to play golf in college, self-taught and kinda just became obsessed with it and a book that maybe I’ll talk about little later that really impacted me is the one thing, which really impacted me like when I read that book, it put words of thoughts and I felt like I always had. So, I like to chase after one thing at a time and then moved on and put all my energy into it. So, anyway, go to college, play golf, get to the end of my college career, wasn’t really sure what I was gonna do for work. Wasn’t too interested, I thought I was going to play professional golf which is a total joke because I wasn’t nearly good enough, but you know, what of a nice end—at that time sort of building momentum towards personal development, business, trying to find mentors. My parents they wanted me to strictly become an accountant or teacher. I just didn’t have it in me. I wanted to try to pursue making money in business and helping people in growth and I just thought there was another way. So, I’ve always been slightly action oriented. So, I didn’t have any experience as far as internships go or my GPA wasn’t anything special, so I figured I needed to take massive action, so I just started reaching out to hundreds of people in companies trying to get informational interviews or figure out how they did it and that was like the first system I can look back my whole life and develop of what are the steps to do this that I can just follow so I can always turn my mind out. So, I was reaching out to tons of people setting up calls and that’s how I was able to get at that time like 45 interviews without applying to a single job, all like companies that I wanted it was Google, SAP, NetUp, Dell, Microsoft, I mean all the companies I really wanted, I ended up going with one because I developed a relationship through the strategy with the president of the company who became my first mentor and it was in tech but anyway totally unrelated to real estate. So, for that job I moved down to Raleigh, North Carolina from Long Island and you being a fellow of Long Island native, anywhere outside of Long Island feels cheap like Long Island is just insane I mean you can’t spend—you cannot spend 100 dollars, you know, just walking out your door. So, basically moved down to Raleigh for this job and at that point I was really going, just personal development, business, reading, networking and a natural byproduct to that I feel like you go down the path of investing and then real estate comes with that. So, I was living in an apartment it was like 1,000 dollars and I thought I was living like a king. I thought like I made it almost. I was making a thing—out of college I was making like 70,000 dollars and I was in sales and I was, you know, thought it was great. And then read Rich Dad Poor Dad, got exposed to BiggerPockets and then it became clear to me, I’m doing this all wrong. I’m throwing my money away paying rent when I should be “house hacking” which is just the process of buying something, renting out other parts of it and offsetting your cost of living or maybe making money to live and in just like a week I found someone to sublet my apartment, I broke my lease, oh, no, no, I was hunting for properties at that point and then when I found one that I thought was gonna work, I found a subletter with someone I worked with and they took over my lease and I did my first house hack. So more or less that was like up to that point of jumping in and taking action, not really sure what I was gonna be doing then feeling like house hacking would be a good way because I did set some ambitious goals when I was 21. I wanted to be financially free by 30 which I’m happy and proud to say that I’m at that or will be at that by 27 which is awesome. For anyone listening that’s young, you’re in tech, and figuring out how they can leave their corporate job or build up something on the side, totally doable and house hacking is I think the best way to do that. But then from then to now added a couple more properties through house hack and some creative financing strategies, I house hacked three times when I was in Raleigh, two single families and the last one was a four-unit property which was actually what I’m in right now to change the loan that I’m in right now. We don’t have to talk about that, but then got into some other projects, flips and some short-term rentals and then the other beauty about getting into property without that much money if it appreciates you can tap into that equity and do cashout refinances which is what I did and now my next move will be probably multifamily. So, that’s the whole spill.
Pancham: Wow, there’s so many items there that you mentioned that I wanna talk about. One thing that we will probably discuss offline is the golf putt. I didn’t know. See, I learned something here that you’re a golf champion here and it’s quite coincidental that I have recently took up golf like I have never played golf in my life and I actually loved the game and I always thought that I would wanna learn and something that I am doing now. So, we will definitely geek out on that. So, you mentioned few things, so you got the job, how long ago was that when you started working full time? How many years?
Jonathan: That was just over five years ago. I was 21, right out of college, yup.
Pancham: And for a tech company?
Jonathan: Yes. The company was NetUp.
Pancham: NetUp, okay, and you still working there or you’re not?
Jonathan: I am still working there and it was a virtual job before Coronavirus but then with Coronavirus kinda being what it is, yeah, so it’s a work from home, work kind of in the field type job, yup.
Pancham: Got it. Got it. Okay, so you mentioned other things like you read the purple book, you kinda started finding the place and then you broke the lease after you found the place and you did house hack, so you explained house hack very nicely that where you are actually getting paid to live, really, so.
Pancham: So, you know, this can be done listeners in many different ways. You can rent out different bedrooms using Airbnb to different people where you are making some revenue or you can rent you know, if you have roommates you can do that where you own the place and roommates pay you for renting out the place from you or you can buy a four-unit property which is where Jonathan is speaking from right now and rent out the other units of the property, so the many, many different ways you can slice and dice this. So, Jonathan what I wanna get into now is like for anyone listening and who is thinking about doing this strategy, tell us about the numbers of the very first house hack that you did and then we would love to hear the numbers on the one that you are living in now like how much did you buy it for? What did it rent for? And what were you paying in rent before and what was,you know, your expenses on the house and how much did you have left over if there was any after you were set and done with your mortgage payment, with your expenses on the property if there was anything left.
Jonathan: Totally, absolutely, and just one thing I wanna say before that is house hacking as a strategy is if there is one I don’t wanna say fail proof but if there is one way to get started that it felt like has the lowest risk it’s this because you are always gonna need a place to live.If it’s paying a rent, if it’s buying something and living and you are always gonna need a place to live but the craziest part is I don’t know if it’s exactly true but I heard that it’s kind of a broad statement that the cost of living as far as either rent or mortgage, principal, interest, typically it takes up for most people that 30 to 40% of their income. So, it’s just such an amazing concept if you can remove that how much you’ve just changed your trajectory of financial independence or financial freedom just by knocking out your typical biggest expense and then maybe even flipping that on your balance sheets and now something that’s profit. It really click for me when I thought about it like that and then just the safety that comes when you need a place to live and then a lot of cases like this one we are talking with numbers on mortgage payment, principal and interest was less on this property that when I was paying in rent anyway. So, I always like to ask myself the question what is the worst thing that could go wrong it’s like a Tim Ferriss concept for all my four-hour work week tech friends out there. I forgot the exact word that he calls maybe like fear setting or whatever it is but basically whatever you are thinking of think through what’s the worst thing that could happen. So, that’s how I usually can get myself moving if I’m stuck and this was the example. So, exact process I was just looking at a lot of places. I just did total naïve back in math of okay I’ve heard I could put 5% down. I could put 3.5% down or 5% down depending on couple of things if it’s gonna be an HFA loan it’s 3.5% but I can also just do a low downpayment owner occupied loan for 5%. So, I think on this first one I went with 5%. I did not go FHA and the property was 118,000 so at the time before I was paying about like 9 to 915 rent and then I think on this one principal and interest after 5% down was somewhere in the range of 500 and then there’s an HOA it was like 150, okay, so…
Pancham: So, 650.
Jonathan: Yeah, it was 650 and then it’s funny my two roommates who actually and this is you know, I actually she call these two friends that came and live with me I recruited them to be my house hack buddies but they were paying me rent which we could talk about if that’s kind of a weird thing for some people of having your friends pay to live with you, but you know, it wasn’t always but here’s the point of me saying that both of them have now gone on to become real estate investors. So, they hooked onto the concept and anyway they were paying each 500 dollars. So, right then and there it just…
Pancham: How big was the place?
Jonathan: It was like 1300 square feet.
Pancham: Oh, wow, it’s pretty big. Okay.
Jonathan: Yeah, it was pretty big. I mean you know, this is Raleigh, you know, so you could have this in quality life down here and at that time I thought it was like massive. But that was it. So, I think between maybe everything on it was like 700 dollars between HOA, principal, interest, tax insurance, and they were paying 500 dollars each and that was when the light bulb went off that I went from just spending all this money every month to now making money every month.
Pancham: And you were living for free. Actually they were paying you for living there.
Pancham: It can’t get any better than that like you mentioned for most people a lot of people 30, 40% goes into, you know, my listener based a lot of people in tech making high salaries that may not be true but it’s something that everyone spends money on and for me if anyone ask me today that what is one thing that you would do differently I would say that I would house hack if I would start all over again. And you know, once you get married and once you have kids, you have many people are not comfortable doing that and you know, I can see why and they have their reasons and you were so wise and lucky whatever you wanna call it where you actually took the step so that’s awesome. So, you’re getting 300 dollars essentially for living in a place that you were living. So that was your first house hack, right?
Pancham: You’ve got hooked really hooked like it’s like drug, right? So now what? What happens?
Jonathan:So I actually on the second deal I wanted to do another one but just for those listening thinking, okay, I’m gonna go out and just tomorrow so the deal would typically house hacking putting down low amounts of money to get into a property. In theory you have to live there for a year. There are some circumstances where that may not be the case, but if it’s for any unethical reason or you’re doing anything to edge the curve here I mean you’re bordering on something called mortgage fraud which you get into a lot of trouble for. I mean I think you can actually go to jail. So, basically that’s not what we were talking about here. So, I was in this property and like you just said Pancham I had the bug like I had etch like I definitely get kind of into stuff when I do it. So, I wanted another one and here’s the other interesting thing for people that wanna start this way and then they could check a lot of other boxes of how do I raise money or how do I get other people kind of aware what I’m doing like if you do one deal and you’re much further ahead especially with the capital raising and the unit count, but when people know what you’re doing at any level I feel like it definitely catches a level of intrigue, you know, and curiosity in people. So, just after that first one I mean I remember my family members coming around who didn’t support this at all to then asking like what are you doing or you know, if I’m telling them, so my dad actually on the second one we decided to do a just single family rental property and I was gonna earn some sweat equity in it so what we did was he was gonna put down the down payment and then I was gonna pay him back over time 60/40 so this was just the second rental. It had nothing to do with house hacking but it was just another way that I thought we could do it and creatively. One mistake I made on that we both got our names on the loan which I would not do again just because you burn a car especially if you’re doing creatively. I would have just had him get that because he’s not an investor. It didn’t mean anything to him but same thing we did that I mean that deal not as interesting. It cashflowed couple of hundred bucks a month. We actually just sold that last week actually funny timing and then I did one more house hack which again wasn’t too interesting but this one the one that I’m in now which is a lot more interesting than house hack because this is a four unit and it was an FHA property but yeah.
Pancham: Okay, so it’s a four-unit property and which means that there are four units like two at the bottom, two at top or four all on the same level like how is it laid out?
Jonathan: This could be good for show notes or I could just send you after, it’s pretty ugly looking place but you know, it’s my ugly looking place. But it’s right by NC State.
Pancham: Okay, in a state university.
Jonathan: Four units townhomes just right next to each other.
Jonathan:Yeah, I mean a little bit of a funny story with it but that’s the setupof the structure.
Pancham: Got it. So, let’s go into the number and the funny story behind it.
Jonathan: Yeah. So, looking back probably I would have tried to do one of these sooner but I didn’t know that you could do a house hack with a four-unit and still do an FHA so just the one loophole here and again just to make it very clear for any beginner listening, an FHA is basically just a—it’s like government program for early home buyers that they are trying to persuade people to buy homes and just get loans and it’s part of what they want, people who are qualified to do they want them to go and being sent to do, so for that reason it’s a 3.5% down loan. So, you can do that on a one unit, two units, three units, four units, the difference is you can do that up to four units but if you just do a low downpayment loan, the 5% you can only do it in a single family, you can’t do that on a two, three or four, it goes up to I think 15 or 20%.
Jonathan:So, anyway I started looking and I knew in my head okay this four unit thing sounds great if I only put down 3.5%. At this time I think it was like 24 I’ve been saving up living like a total peasant and you know, basically like I was in it like I was making short-term gains I mean don’t even get me started on people blowing money in their 20s if they actually wanna be financially free I’m like you don’t want it. So, and I was living a peasantit was just small sack sacrifices.
Jonathan: Okay, but in my head I was thinking okay if I have 30,000 dollars which I have saved up I could find something up to let’s say 500,000 that I could find as a four unit and put 3.5% down. So, it still ended up being a little bit more than that. It was 550 but then during inspection there was a couple of repairs that the seller was I think very motivated. I think they had either financial hardship or something but they gave up 45,000 dollar credit back at closing. So I guess all in all was 505 but I had my four unit. It was an MLS property, went out and sold it. I had seen a lot of that that time and made an offer on it and then I hadn’t moved into it yet. I was doing some repairs on it. I had some other like part of the seller credits for some stuff to fix up and in that time with my job at NetUp and you got to remember I committed to now okay I’m doing thisFHA loan, I’m committing to now moving into this property and living here for a year I get a call from the company I work at and they said you’ve just been basically now promoted to the field in New York and I panicked because I’m thinking now I just bought this thing and I’m about to be committing mortgage fraud and I have to leave and I’m gonna have to quit my job to execute on this property and that’s one of the loopholes in FHA loan which I kinda touch on earlier. That’s one of the ways you cannot live in the property. If you have to move for work and you’ve a signed letter that your location changes, you can give that to the bank and you can turn it into a rental right then and there. So that’s what happened. I moved back to New York and this became just a rental. I’m moving back into it now to declare it my primary so that I can remove the PMI which is just mortgage insurance that happens on any loan under 20%, so yeah, that’s the deal but I did panic.
Pancham: So, okay, I think I’m glad that you got over that hurdle, so let’s do the numbers. So, 5/50, 45 seller credit, 505 that you did and 3% down so that’s around 15 to 20,000, so how much did you put down after all the closing cost and everything and do it, roughly.
Jonathan: There were some other like little repair pop ups.
Jonathan: But it wasn’t more than like 35,000 like all that’s what I budgeted that was it, yeah.
Pancham: So 35,000 your all in on a 550,000-dollar property with 45 credit, it’s 505. So, now how much was the rent on the three units?
Jonathan: So, each of the units was renting we’ll just make it simple some above, some below 4,000 dollars.
Pancham: So average thousand and you moved to New York, so you were really getting 4,000 dollars in rent approximately per month and how much was your mortgage payment plus PMI plus your tax insurance and any of the other cost like how much were you per month?
Jonathan: So principal interest tax and insurance was just shy of 3,000.
Pancham: Just shy of 3,000. Okay.
Jonathan: It was 2900 actually, okay, and then I was managing from distance for a while and then I found someone who is going to manage it for cheap but then I found someone better who was then gonna do 8%. So, yeah, that was my principal interest, tax insurance and then management was between but then the revenue was about 4,000 a month.
Pancham: 4,000 a month, but once you moved in like now you moved in, so you have that unit to yourself, one unit and three units are renting at approximately 3,000, so you kind of breaking even. So, you’re basically they are paying down the mortgage for you-
Pancham: -and you’re living for free and all the money that you have remaining you are using that to build and buy other properties.
Jonathan: Yeah, pretty much.
Pancham: So, that’s awesome, man. This is awesome. So, anyone listening like I’m getting motivated by just listening to that, you know, it’s such a great strategy obviously it’s very personal to, you know, everyone has different objectives and if you can make it happen, definitely a great way to get into the business, you also get experience of managing it and you living right there and you know, you can’t have anything better than that as your first investment. So, great, Jonathan there, really happy for you beginning financially free at the age of 27. That’s awesome. All right, so I want to ask you like two questions before we move on to the second part of the show which I call Taking the Leap round and these two questions I have recently added and asked everyone, one question I have for you is COVID-19 situation, I know you were in Plainview here in New York, you moved back to Raleigh and are you changing anything because of that, anything that you are doing before but you’re doing now? That’s my first question for you.
Jonathan: Yeah, so quick I guess there’s blurb on because I don’t like to give advice that I don’t take. I really like to walk the talk, so when Coronavirus hit and I also run a small group and if I can help younger people to get started so I was thinking it was probably the best time to liquidate, lean out your life like cut your expenses and prepare and save and be ready for a bad thing to happen or also opportunities so for me when Coronavirus hit, I did exactly that. I broke my lease in New York. I sold on my stuff and I literally just moved to the areas that I was prospecting for property and just figure in a virtual world why not go see some stuff and meet the people and just live a very like minimal lifestyle at least feel what’s gonna happen for the next few months. So what that meant for me I moved to the middle part of the country for about 2-1/2 months and I was literally I was in Kentucky, Indiana, Ohio and I was just living in long term I guess short term housing and I was just meeting people all the time and I wasn’t spending a lot of money and I was just trying to use this time as an opportunity to keep moving and gets smarter when it felt like everything was paused. So, that was kind of my view of looking at an opportunity instead of something that was a challenge and in that sense I also feel very lucky that I never got Coronavirus. I still I mean I could but no one in my family is affected, so I mean in that sense it is a horrible thing but I like to try to spend things to see positive and not negative so in that case I was thinking okay an opportunity and I was telling all my friends that were asking who were like potentially investing what do you gonna do? I said why don’t you go live in the territory that you’re thinking about doing? You’re trying to do out of state investing why not go live there? You’re single, you just broke your lease, and you’re living at home anyway why not go do that? And none of them did it because they just don’t take action. But you know, it is what it is. So, for me I took the first couple of months to just evaluate, get liquid, I cash out refi all my property so I wanted to have as much liquid cash as I could. I cut asmany expenses as I could so that worst case scenario I could live very lean and then I went out and I was just pounding pavement. I was knocking on doors. I was cold calling people. I added a couple of virtual assistance to do outbound to develop some relationships and cold calling properties and then now I have a little bit of a different strategy that I’m doing. I’m focusing actually when Coronavirus hit I bought two short-term rental properties. And probably the worst time on paper to buy short-term rental property when no one can travel. I got lucky with one and the other was more like a little more strategic but they are in places that are getaway spots that are have done well because people have kind of run from the cities too but anyway right now believe it or not my focus is adding one or two more of those because I want to buy a second home with 10% down bank debt that you can still get, anyone can get listening to this that has a job, you can buy a second home in any city pretty much and put 10% down living it or spend a small amount of time in it per year and put it on Airbnb and basically be paid very nicely to have a vacation home and any place that you’re interested in. So again it’s just part of my strategy to just get more stable in worst case scenarios I don’t know what’s gonna happen with my job. I don’t know what’s gonna happen with the company but I know I have this debt that I can get from a bank that I wouldn’t be able to get if I was just an entrepreneur or not with a W2 job so that’s my current focus right now but then after that I’m hoping that then some—not hoping for distress but I’m thinking there’s gonna be a little more distress may be come November, December, January and then repositioning back for those multifamilies that I was developing relationships from the last couple of months.
Pancham: Got it. Great. So my last question before we move on to the next section is do you have a morning routine that you follow? If not, that’s totally cool.
Jonathan: Yes, though it changed it was very rigid before Coronavirus. It was waking up on an airplane mode, there’s one part of my routine I have kept for like six months and it’s just being great actually. I started my day not with text, not with email but I go in YouTube and I find like Tony Robbins video or Gary Vaynerchuk video, Ryan Serhant and I watch one of those videos every morning. It’s the first thing I do. My eyes can barely crack open and I’m trying to consume some good energy to start the day then most days what I would do is I have to think of a five-bullet journal just like quick snapshot I’ll jump in and write out okay what I’m grateful for, what I need to do that day, my review yesterday like I don’t beat myself on that but to do it or not but usually I do I don’t want to feel bad if I don’t but I was waking up early, I was trying to get up like 6 and trying to get good two hours of like important work on before email or text. I’d say with Coronavirus that routine is pretty much the same which is moved like an hour to an hour and a half later. I’m finding myself during Coronavirus working a lot later at night, I don’t know why just maybe because I’m on my computer the entire day when I’m home I don’t know I just can’t get away but usually that’s my morning routine. I’ll start with something motivational. I do not check email for the first 90minutes at least.
Pancham: That’s nice.
Jonathan: Too many bad days that started with panic and I guess this is another thing I jump in, I do plan my day the night before. So, I was doing that day off and then I found it was just a little too dangerously closed to checking my email. If I was looking at my calendar that morning of then they are just right next to each other in outlook so that was it. Plan the night before. Start with something motivational and then like I said I’m a big one thing believer so I try to knockout my big rock for that day in that first 90-minute session whatever it is. And I also now one last thing on that I used to tell myself a lie like oh I need my email open to do this thing, no, now I make sure all the information is extracted out of my email so that it’s just in whatever folder I’m working at if it’s analyzing a deal or sending messages to people I don’t need the email open. So then I’ll open it up, reactive, I’ll catch up on stuff and then usually I had my first meeting in like 9.
Pancham: Great, man. That is working out for you and I definitely agree with the Tony Robbins part. There is something that I can tell you which I learned from someone which was Darren Daily, so I’m big Darren Hardy fan and he has something called Darren Daily which he does every morning for people who listen to him and something if you wanna check out. So, great, thank you Jonathan for sharing that. We will be back after this message.
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Pancham: So, Jonathan this is the next section of the show which I call Taking the Leap round and I ask these four questions to every guest on my show. My first question for you is when was the first time you invested outside of Wall Street? Was it your first house hack?
Jonathan: When I was 21, yeah, just with that first house hack and that’s the first time that I got my taste of not investing in Wall Street and really haven’t gone back since.
Pancham: Great. My second question did you have any fears that you had to overcome when you bought that first house hack?
Jonathan: Dude, the worst. I probably go darker than anybody. I just like I need to knock myself out of it but with everything I go with like this is just gonna be a huge failure like the worst thing is gonna happen but then back into that what’s the worst thing it can happen? So, but you know what I found that helps me with this is like accountability like one person that can help me just see how ridiculous my thinking is. So, friends, coaches, mentors, but yeah, I have crazy fear with everything. I guess now I’m just better at acknowledging it.
Pancham: Great. Thank you for that. My third question is can you share with us one investment that did not go as expected? Do you have any?
Jonathan: When I first moved back to New York, I was really torn on if I should invest out of state one more again or if I should try to do something locally and…
Pancham: On Long Island, right?
Jonathan: Yeah. Do I need to learn this mistake once? And I tried to do locally. So, I found a property that I thought I had an unfair advantage on and I did but I just didn’t execute well. It was a luxury flip in Plainview that I bought—an online auction that I bought with hard money for 610,000 and-
Jonathan: -on paper had everything I thought would be great. It was my first flip. Looking back so much risks and it just took long and I didn’t know how to manage contractors at that time. It’s more rehab than I had ever done I mean it ended up being in the end like a 5,000 dollar loss and I was projecting like an 80,000 dollar gain, which again wasn’t even great considering all the risk, but uh,that was so stressful. It was just like I would go there every day and there would be like another thing that would annoy me and then you know, another thing about not having like a permit or something and the opportunity cost but the learning, so that was the one but the biggest lesson I took from that is that I don’t like flipping and I don’t like investing in New York.
Pancham: Wow, good lessons man. Good lessons you learned them early and I always say that those 5,000 dollars I don’t call that a loss, that’s a tuition fee that you paid and it’s awesome, you know, you learned something and you made some decisions, you’re a better investor because of that. So, my last question for you is what is one piece of advice would you give to people who are thinking of investing in Main Street that is outside of Wall Street?
Jonathan: Find someone that you really like in the space and just follow that one person and if you can make them your coach or mentor, amazing, but I would just follow their steps like I think about this question in the sense of it’s all out there like I said this on one of my podcast today but it’s so true. If it was just about information, the librarians would be billionaire with 6-pack abs, it’s not. There’s too much information at this point. So for me it’s just following one person or following one logic of thinking and immersing yourself in that and becoming an expert in that and if it means paying to get around that person, do it. If you think you can piece it together but you’re just on one track, keep the one thing in mind just do that one thing for six months and don’t get shiny objects syndrome and then from there I think you have a really good chance of bigger successful. Given you’re gonna have to work hard and all that stuff that everyone says, but I think it’s just drilling into one thing or one person and pretty much is giving yourself to that cause for a good six months.
Pancham: Great. Thank you for that advice, Jonathan. So, it’ been great and you know tell our listeners how they can reach you, they can connect with you if they wanna learn more about you.
Jonathan: Yeah. I have a podcast as well. It is called the Millennial Millionaires Through Real Estate podcast. Check it out I mean it’s very—I’ll try to be as tactical as possible. The main way for people to connect I do a lot more content releases in a Facebook group that’s tied to that podcast and for anyone to join from this podcast, if you shoot me a DM or an email at firstname.lastname@example.org, I’ll send you just a couple free guides that I use to analyze deals or to add value to people if you’re looking for a mentor or a coach without paying for it. So, that always helps. But the Facebook group is probably the best way and then Instagram is just @jonjfarb.
Pancham: Great. Thank you for your time here Jonathan. It’s been awesome and your journey and wish you good luck for your future endeavors.
Jonathan: I appreciate that, Pancham. Thank you.
Pancham: Thank you. Thank you guys for tuning in today and listening to Jonathan’s multiple house hack stories and the numbers and you can see why this is a great way to get started and I know if you guys have family and kids, it kinda gets hard. We do have a story of a couple who did that, you know, even with their kids, we recorded I think episode number 8 or 9 with John Casmonand GeetikaCasmon, so they’ve done that as a family, so it’s really you know, a very personal choice but if you’re getting started and you want to be an active investor, it can be a great, great beginning. You’re getting paid to live and saving all the money that you’re making and using that for investing. Thank you for listening. Thanks for joining in and if you have questions, email me at email@example.com. Again, that’s P @thegoldcollarinvestor.com. This is Pancham signing off. Until next time. Take care.
Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com and follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing.