Just because you’re young doesn’t mean that you can’t become a real estate investor. Just ask young investor, Chad Carson. Carson is 30 years old and owns 90 rental properties. When Carson began investing in real estate, he only had $1,000 to his name and he turned that into a profitable business.
In episode of Mad Fientist, Carson revealed his “house-hacking” strategy.
What is House-Hacking?
“I bought a house, a quadruplex that had four units. I lived in one unit, and then I rented the other three units out. And so I was basically living for positive $100 a month by getting $400 in rent for my three tenants. So that’s $1,200 coming in. And my mortgage, taxes, and insurance were about $1,100,” Carson, now 37, explained on the podcast. “So, I was living positive by using my skills as a real estate investor, and by living in an apartment that kept my overhead super low, even when I went and bought my own property.”
What is live-and-flip?
Carson’s other favorite strategy is what he called “live-and-flip” where he buys a home and over the next few years, he’ll fix it up then resell it and make a profit. He also said that it’s important for young people to treat your first home as an investment and avoid settling down too early.
“Particularly, in your first 10 years, if you make mistakes of buying emotionally on your residence as opposed to buying in a very calculated manner by making your residence a house-hack or a live-and-flip, or just renting and investing that somewhere else, the magnitude of that mistake is huge 20 to 30 years from now.
“It’s like $700,000, [or] a million-dollar difference, for somebody 20 to 30 years later who made the choice to make their first home a nice home, a great neighborhood, and being in the top high school as opposed to making a decision to treat your home like an investment or just rent. It’s a major, major difference.”
How to make it big.
Carson explained that investing in real estate can be a great investment in the long-run but real estate investors should not expect to make a fortune in the beginning:
“Rental properties are wonderful for building wealth … [but] they’re not going to produce a lot of income on the front-end — at least not consistently — because you might make $200 a month on a rental property, but then what happens if a year and a half from now, the heating and the air system goes out on that rental property? That’s a $4,000 to $5,000 hit. And so really, the rental property game, as opposed to flipping properties, is all about generating big chunks of cash that you can use to pay your bills, and hopefully, to save money.”
Carson lives off the income from his investments which has allowed him to move to Ecuador with his family. He’s living proof that anyone can get be a real estate invester and make enough money to quit their job and have some freedom to do what they want to do.