How This 22-Year-Old Bought a Duplex with 5% Down and Zero Experience

TL;DR

Steele Evangelisti bought his first duplex at age 22 by house hacking with a 5% down conventional loan and 3% seller assistance toward closing costs. He lived in one unit, rented the other, and handled setbacks including a leaking porch, a $3,000 electrical issue, and a car breakdown. Read on for his financing, negotiation, and renovation strategies.

Transcript

one of the fastest ways to get into real estate is house hacking a small multif family property But what if your first house hack also came with a leaking porch a $3,000 electrical issue and a car breaking down right after closing our guest today Steel Evangelist didn't let any of that stop him At just 22 years old he's two deals deep and showing a... Read More

Key Insights

• Steele Evangelisti began investing in stocks at 16, transitioning to real estate after catching the 'real estate bug.'
• His first real estate deal was a duplex purchased through house hacking, where he lived in one unit and rented the other.
• Despite challenges like a leaking porch and a car breakdown, Steele successfully managed his first property with creative problem-solving.
• Steele used a 5% down conventional loan instead of an FHA loan due to restrictions on fixer-uppers.
• He employed a seller assist strategy, where the seller contributed to his closing costs, making the purchase more affordable.
• Steele learned DIY renovation skills via YouTube, completing a bathroom renovation for under $1,500.
• His second property was also found on Zillow, and he used similar financing strategies to acquire it.
• Steele emphasizes the importance of house hacking, even if it means renting out a room or living with parents temporarily to save money.

Questions & Answers

Q: How did a 22-year-old buy a duplex with 5% down and no real estate experience?

Steele Evangelisti used a 5% down conventional loan and received 3% seller assistance toward closing costs. He house hacked the duplex by living in one unit and renting out the other, reducing his living expenses while gaining practical real estate experience.

Q: Why did Steele use a conventional loan instead of an FHA loan?

Steele originally expected to use a three-and-a-half-percent FHA loan. After learning that FHA financing has restrictions that can make fixer-uppers harder to finance, he chose a 5% down conventional loan instead.

Q: How did Steele find his first duplex?

Steele repeatedly checked Zillow, other property listings, and Facebook groups while attending college. When the duplex appeared on Zillow, he contacted his agent within 2 minutes because he believed it was $20,000 undervalued.

Q: How did Steele negotiate a lower purchase price?

After the sellers delayed while waiting for competing offers, Steele’s agent suggested lowering his offer to pressure them to decide. The tactic worked, and Steele purchased the duplex for five grand less than his original offer.

Q: How did house hacking work for Steele’s duplex?

Steele lived in one unit while renovating it and rented out the other unit. This gave him rental income, hands-on renovation experience, and a path toward eventually renting both units after moving out.

Q: What financial setbacks did Steele face after buying the property?

The property came with a leaking porch and a $3,000 electrical issue. His car also broke down shortly after closing, but he continued managing the deal despite these unexpected expenses.

Q: How did Steele keep renovation costs low without construction experience?

Steele learned renovation skills through YouTube and completed work himself. According to the existing page details, he renovated a bathroom for under $1,500 despite having no prior construction experience.

Q: What can first-time investors learn from Steele’s approach?

Steele prepared by monitoring listings, learning his local market, and saving income from high school, college, and his first full-time paychecks. His experience also shows how house hacking, seller assistance, negotiation, and DIY work can reduce the barriers to a first property purchase.

Summary & Key Takeaways

• Steele Evangelisti, a 22-year-old investor, purchased his first duplex using a 5% down conventional loan and house hacking strategies. Despite facing unexpected challenges like a leaking porch and car issues, he successfully managed the property.

• Steele's second property acquisition followed a similar path, utilizing creative financing and seller assist strategies to minimize upfront costs. His approach highlights the value of house hacking and financial discipline.

• Through DIY renovations and strategic financial planning, Steele has managed to live rent-free and build a growing real estate portfolio. His story serves as an inspiration for young investors looking to enter the market with limited resources.