I Turned $37k into $300k!!
$37,000 into $300,000
Jesse Taff: What's up everybody, Jesse Taff, Bryce Gonser, Buying the 208. And this episode is gonna be a really cool one. My man is gonna give you his secret to how he turned $37,000 into $300,000.
Bryce Gonser: So guys, a lot of you guys commented on the post I made, which I really appreciate. Jeff is in the same exact boat, he's done the same exact thing even more so. But really what we wanted to talk about was the very first two investments that I ever made, as I was beginning my lending career and really get into real estate was the first two properties that I bought. And I bought them as a primary residence. So I bought the first property a little over two years ago, it was about 290 at the time, and it's well over 450,000 now. I bought it 3% down, it was not a bond loan, it was just the conventional. So that total out-of-pocket cost was about 14,000 give or take, that's my down payment plus closing costs, 14,000.
And then the second one I bought, so I lived in that for over a year right? And then decided wasn't for me. I decided to move to separate property. At that point, you have to go 5% down for conventional. The property I bought at that time was 335, just really close to the village here, and 5% down plus closing costs and it ran me about 21-22, somewhere in that range. I can't remember, my numbers might be off, but I remember looking at them as about 37,000 total, right? So 37,000 was my total out-of-pocket expense. Two years later from the first one, one year later from the second one, I now would take home, if I were to sell both, a little over $303,000. And that's minus real estate fees, that's minus debt payoff, and net profit would be what I would take home. So a lot of, like a lot of people our age, right younger type millennials, Gen Z, or whatever, they want that quick 300x, 200x gain. They want that next GameStop. They want the next Doge. They want the next Shibu, whatever, and who doesn't, right? Who doesn't want that, but a lot of times what gets overlooked is living in your home. You know, how that can actually turn into an asset, get it out of the liability category and into the asset category. And that is an insane, just overall investment of almost eight and a half axing my initial investment to walk away with if I want it to right now over 300 grand. Which I could then turn and do a multi, I could walk away with more if I were to 1031. But living and buying a primary residence along with you know, having someone else pay down the mortgage every month, a taxable interest that I can write off, depreciation of an appreciating asset, there are so many things that you can take advantage from actually living in a home and then eventually moving on to the next one or just let that ride the way.
Jesse Taff: Yeah, and my biggest takeaways from that are, most people think when they hear real estate investing, like well, I don't have $100,000, $200,000 cash. Yeah, you don't need it. 3% down on your first one. 5% on your second one. You didn't sell your first one, it’s rented out. You have two properties for 3% and 5% down, $37,000 cash out of pocket. And it's almost 10x.
Bryce Gonser: Yeah, it's insane. And so when people come and say I want to do duplex, triplex, four Plex, sweet. If you can do that, do it. But if you can't live in it for a year, watch what it does. If you would have done it back then, you know, you would have had an incredible run that you could have sold, you know, avoided short-term capital gains tax, and then move that into something else, especially if you were to do a 1031 exchange.
Jesse Taff: Yeah, yep, exactly. So your personal residence can be and really, in my opinion, should be looked at as a potential investment. Yep, you're also living in it. So it has to have other, you know, reasons and needs for it as well. But yeah, don't overlook that. And also don't overlook if you're in one right now and want to invest in real estate. A lot of times it's actually best to keep your current property and move into another personal residence. Lower down payment, better interest rates, keep the previous one.
Bryce Gonser: Yeah, I talk to an individual about that. It's so easy guys, it would be stupid at this point with how low interest rates are, to do a cash-out on your primary as an investment property, bounce over and put 5% down. Or do a HELOC on that one, take it out and pull it down. You will probably be cash flowing enough on the first one, if you do it right, that actually your mortgage will be significantly less on paper because you can just take whatever you’re cash flowing, throw against this mortgage, and your mortgage could potentially be the end of date lower than your current one, essentially.
Jesse Taff: And if you want to take this house hacking to the next level, rent one or two of the rooms out and you're gonna be living, you're gonna have 1, 2, 3 properties and essentially not even paying a mortgage.
Bryce Gonser: Yeah, and you'll have a pretty significant, you know, net worth on paper for doing that.
Jesse Taff: Yeah. And one thing we wanted to ask all of you is, we're trying to be as transparent as possible. We were thinking, especially as you brought up 37,000 to 300,000 with your personal real estate purchases, sharing our you know, our net worth our personal finances, essentially not the specifics, but really just to go to show you we're living what we're preaching. The majority of our net worth and wealth is in real estate. And we'd love to show you specifically how and what that looks like. So let us know if you want to see that.
Bryce Gonser: Absolutely, guys, again, any questions you have, send them our way. Subscribe to the thing. Talk to you guys soon.