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

TL;DR

22-year-old Steele Evangelisti buys two properties using creative financing.

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: What inspired Steele Evangelisti to start investing in real estate?

Steele Evangelisti's interest in investing began at a young age, starting with stocks at 16. He transitioned to real estate after realizing its potential for passive income and long-term wealth. The 'real estate bug' caught his attention, and he couldn't resist exploring opportunities in the market.

Q: How did Steele finance his first real estate purchase?

Steele financed his first real estate purchase using a 5% down conventional loan. He initially considered an FHA loan but found it unsuitable for a fixer-upper due to its restrictions. He also used a 3% seller assist to help cover closing costs, making the purchase more affordable.

Q: What challenges did Steele face with his first property?

Steele encountered several challenges with his first property, including a leaking porch roof that required a $3,000 repair and a car breakdown shortly after purchase. Despite these setbacks, he managed to navigate these issues through creative problem-solving and financial discipline.

Q: How did Steele manage renovations on his properties?

Steele managed renovations by relying on DIY skills learned from YouTube. With no prior construction experience, he successfully renovated a bathroom for under $1,500. His willingness to learn and take on tasks himself helped him keep costs low and improve property value.

Q: What is house hacking, and how did Steele use it?

House hacking involves living in one part of a property while renting out another to offset living expenses. Steele used this strategy by purchasing a duplex, living in one unit, and renting the other. This approach allowed him to live rent-free and save money for future investments.

Q: What financing strategies did Steele use for his second property?

For his second property, Steele again used a 5% down conventional loan. He negotiated for the seller to cover the transfer tax, reducing his upfront costs. By employing these strategies, he minimized the financial burden of acquiring a new property while continuing to build his portfolio.

Q: How does Steele plan to grow his real estate portfolio?

Steele plans to grow his portfolio by continuing to use creative financing strategies, house hacking, and disciplined saving. He emphasizes the importance of principal paydown and reinvesting savings into new properties. His long-term goal is to increase property value and equity over time.

Q: What advice does Steele offer to aspiring real estate investors?

Steele advises aspiring investors to start small and be resourceful. He highlights the value of house hacking, even in unconventional ways like renting out rooms or living with family to save money. He also stresses the importance of learning DIY skills to reduce renovation costs and improve property value.

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.