From Homeless to Homeowner with a 7-Bedroom Rental Property

15:42Real Estate Rookie Hosts:like you can you combine like a couple of strategies here right you have the partnership strategy of like getting together with some other folks to acquire the property then there's the house hacking component of hey we're going to rent out the extra space but then you also layered on we're going to rent out each room individually, right? So we got room rentals, house hacking, partnerships, all coming together in one deal, which, man, talk about being scrappy. I think one of the questions though, that a lot of folks might have is the sacrifice maybe that comes along with sharing your space with so many people.

16:18Real Estate Rookie Hosts:How has that experience been for you? Like we have a friend in the podcast, his name is Craig Curlop, and I always bring him on when we talk about house hacking, because his first deal, his first house hack, he was sleeping on the couch, he bought like, I don't know, it was like a four or five bedroom. And to maximize the revenue, he was sleeping on the couch and renting out all of the four or five bedrooms. It's like, do you feel like you're in that position? Or just like, what's it been for you so far? Going through this process?

16:43Isaac Mann:Yeah, totally. It's been pretty good for us. Because like, We're just a bunch of 20-somethings. We've all been living with roommates for the last seven years. It hasn't been a big adjustment for us. Most of the guys that live here, I've either lived with before or they've been my good friends for a while. For us, it wasn't a big deal at all. I love those stories of people who buy a whole house and they just live in the garage and rent it all out. But I get stoked on those just because it's just maximizing the space.

17:21Real Estate Rookie Hosts:Yeah, Isaac, you're not doing enough. You've got to be living in the box truck in the driveway, man.

17:26Isaac Mann:That's the goal, yeah. I want to get a house with a big backyard, park the truck back there, rent a whole house.

17:35Real Estate Rookie Hosts:Actually, the live-in flip I'm doing right now has an RV hookup outside too. I can't remember which guest it was. we definitely interviewed someone who did something similar to that but they had like a like a camper van or like an rv and a bunch of land and they would stay in the r like in the camper van and they would i think they were short-term renting or maybe mid-term renting out the main house but they would stay in the camper van and like man what a great way to like really drive some extra revenue to your property isaac let's break down the actual numbers on this property so what was the and did you find this deal in the mls we didn't even talk about that uh yeah yeah it was on

18:10Isaac Mann:Zillow.

18:11Real Estate Rookie Hosts:And how much was it listed for?

18:13Isaac Mann:Yes. So I'll kind of go like day by day, more or less, but we, we found it, we saw the listing, um, in like April and it was listed at 470 ,000. It was already down from 570. It was going down like month by month, you know, I could see the price history. And so my eyes just lit up like, Oh, wow. You know, they need to get rid of this thing. And so we were tossing around the Zillow link in our group chat and thinking about it. And so, um, I just set up a tour. We went and checked it out and at 470, it was, you know, pretty expensive while we were talking about it and thinking about it, the price goes down to 460 and I'm like, man, they need to sell this thing.

19:05Isaac Mann:We got to get on this. And then we were still like, you know, reaching out to some lenders, talking about different things. And it goes down to 450. And we were like, ah, man. And so we finally got approved and we made an offer at 428. You know, we're just seeing, we're seeing it go down. And so we wanted to see if we could, yeah. And so, um, but it was like, I guess, you know, everybody's getting the Zillow emails that the price goes down. And so when we put her in our offer, there was like three or four offers at the same time. And so, uh, we ended up going back up to four 50, which was the asking price at the time.

19:51Isaac Mann:And then they said, give us your highest and best offer. and we went to$4.57,$5. So that was the official purchase price when we got it under contract.

20:05Real Estate Rookie Hosts:And what was the date of this? What year was this?

20:10Isaac Mann:2025, this past year, we got it under contract at the end of May. That's just how long it took to get financing and everything figured out. And so, yeah, and then we said that set us up for a closing at the end of June.

20:27Real Estate Rookie Hosts:So and with three different partners in the mix, Isaac, how do you guys actually come to a decision on? Yes, pull the trigger versus no. Was it everyone just kind of felt good about it? Was there some healthy debate? Was there, hey, we're going to take a vote in majority rules? Like, how did you guys go about actually saying this is first this is the property? But then second, this is the number that actually makes sense for us. So as far as the property, like, you know, you never want to get too attached to a deal,

20:54Isaac Mann:but this one was kind of a fluke, you know, a seven bed, five bathroom. And when we were looking at different houses, this was kind of the only one that penciled out for what we wanted to do. And so like we looked at three other houses, but for me, like this was always the one that we wanted to get. And so talking about when it was time to pull the trigger, like, um, this is maybe a tip for the rookies out there is if you have an agent and you're deciding on whether or not to make an offer, like if you ask me, make the offer because you can always back out, you know, before your deadlines. And so I was, one of my partners was, uh, feeling he was, you know, a little hesitant to put down an offer, you know, on a$450 ,000 house.

21:47Isaac Mann:And I, you know, got on a phone call with him. Hey man, there's no commitment. Um, it's a great house. It's what we want. Um, if we need to back out, we can. And so that gave us a lot of confidence, uh, to move forward with it.

22:03Real Estate Rookie Hosts:And so what did your mortgage payment end up being after you did three and a half percent down?

22:11Isaac Mann:So our mortgage payment is like thirty one fifty.

22:15Real Estate Rookie Hosts:And that's with escrow, your property taxes and insurance, too.

22:19Isaac Mann:Yes. P.I.T.I.

22:20Real Estate Rookie Hosts:What's your what's your interest rate, Isaac? We got five point nine nine. Wow. That's pretty good in twenty twenty five. Yeah, I was kind of surprised. So hold on. Let's pause there for a second. I mean, because sub 6 % in 2025 wasn't super common. I don't know if you guys just got like lucky when it dipped or was there some sort of bonus or promotion? What bank did you go with? Was it a local bank, a regional bank, a credit union?

22:43Isaac Mann:They're not like a local bank. They're not like a little branch. They're a lending company.

22:48Real Estate Rookie Hosts:Like a brokerage?

22:50Isaac Mann:Yeah.

22:51Real Estate Rookie Hosts:Did you pay any points, do you know, to get the interest rate down?

22:55Isaac Mann:I don't think we did. They gave us like a closing credit is what they call it. I think they credited our account towards our closing costs, which I think we could have paid that and not taken the credit and gotten our rate down a little bit more. But maybe one factor is like when we were looking at the conventional versus FHA, the conventional was a lot more expensive. And I think that was into the six, six percentage. but when we got when we went to fha it was uh yeah we got it to 5.99 actually have you i haven't seen

23:29Real Estate Rookie Hosts:anyone close at least from the conversations i've had aside from like i think one person i know used like some weird chase thing he had a lot of money with him but most of the investors i'm i know and i talk with i don't know anyone that closed below six percent in 2025 do you do you know anyone or No, I, Daryl was doing a loan for VA loan and usually you can get a lower interest rate and he started the loan process in December and that was a 6.125%. And, but me have to negotiate since things have changed from them and we still haven't closed. So now we're locked in at a 5.99 % even right now?

24:12Isaac Mann:Yeah, I don't know. We're also owner occupied. So that could be a factor. And yeah, in June, I don't know. I guess we got lucky.

24:21Real Estate Rookie Hosts:So what do you guys end up charging for rent from your tenants? And then how much are you each contributing every month yourselves, if any? Yeah, we get about 700 per person on average per room.

24:36Isaac Mann:And that's maybe a little bit more than we were hoping we could get um one of our rooms uh has like well i guess let me take a break we have five full bathrooms and so we're able to charge a little bit more because two of our renters have their own bathroom and actually have their own basement both of them it's a weird house um yeah we have two separate basements and they don't even share a wall

25:04Real Estate Rookie Hosts:it's crazy but i like trying to imagine so like is the access to the basement like in their bedroom or they just get that access to the basement the house is laid out it's got like a

25:18Isaac Mann:like a living area with a living room and a kitchen and two bedrooms and you go like up a half by the stairs and there's a bedroom with an ensuite and then there's a master bedroom with an ensuite and then below that is one basement and then below the first living area is one basement and so and they've all got their own doors and everything so yeah it's a weird house anyways to go I think your first question was we get about 700 per room and yeah with three guys we pull in about$2 ,100 from rental income, which leaves the owners with about$10.50 and then utilities and all that.

26:05Real Estate Rookie Hosts:How much were you paying in rent at your last place, Isaac?

26:08Isaac Mann:In my last place, I was paying like$8.50.

26:10Real Estate Rookie Hosts:So you cut your living expenses in half and you got to own the place that you're actually paying money toward every single month. That's a big win.

26:20Isaac Mann:Yeah, it was a huge improvement for us. It was great.

26:23Real Estate Rookie Hosts:So what about utilities? How are you guys handling that? Do you split it between the six of you or how does that end up working out? And even like, you know, common area stuff like, you know, are you sharing food in the kitchen that you're sharing cost paper towels, you know, things like that? How does that all work in the co-living situation?

26:47Isaac Mann:Yeah, so we split utilities six ways. And so that's on top of what we get for the rent. But it's not too bad with six people and just a single family house. Normally, for most of the time we've been living here, it's been like 60 bucks per person. In the winter, it's been closer to 100 or 110 bucks per person. um as far as like sharing spaces most of us have our own bathrooms which is super nice um and so that's not as big a deal the paper towels a little bit of a contentious thing that is another thing are uh they're expensive they are they are got to get that bounty um um, but our, we only have one kitchen in our house for six people.

27:38Isaac Mann:That's a little bit, um, a little bit tight. And so, but we, I don't know, it's pretty workable because most of us have just like a mini fridge or a personal fridge. And so, um, that's probably the biggest bottleneck that we've been able to just fix that way. So.

27:56Real Estate Rookie Hosts:And just to clarify the consumables, like the toilet paper, paper towels, that's something that you guys all put in for together

28:02Isaac Mann:as well um we're all friends we just switch off we just just text in the group chat hey i got it this time somebody else get it next time tony we should start doing that with our kids like

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32:27Real Estate Rookie Hosts:Stop letting outdated lending practices hold you back. That's hostfinancial.com, where your property's potential meets unlimited financing. All right, we're back here with Isaac Mann, and Isaac, before the break, shared with us how he found the deal, how he's structured with his partners, how he's combining partnerships and co-living and all these different aspects. But one of the things we didn't touch on earlier was the actual FHA inspection. And there are a lot of pros to the FHA loan, one being that you have the ability to get them with a very low down payment. They're a little bit more flexible on DTI and things of that nature than a conventional loan.

33:01Real Estate Rookie Hosts:But one of the big challenges or one of the big detractors of an FHA loan is the inspection process. What was the inspection process like for you on buying this deal? And was it all pretty reasonable request? Or I've heard horror stories about things that FHA has asked folks to do. So what was that experience like for you?

33:20Isaac Mann:Yeah, we, they gave us a laundry list, you know, things to do. So we, we had our inspector come out and do a regular home inspection, which was good. And then I think they sent out an appraiser as well. It was kind of just in that process. They also sent out an FHA inspector and, you know, we've, we'd heard like the, like, oh, if there's any peeling paint, you know, I feel like that's the big one. And so we expected a couple of things. And they gave us, so they did the inspection and then they gave us a list of, there can't be any trees touching the house and there can't be, they gave us a few spots that we needed to touch up some paint.

34:06Isaac Mann:and they gave us, uh, in the back part of the gutter was hanging off a little bit. They said we needed to repair that. And so it was pretty reasonable. Like nothing was, oh, they also told us we had to fix something in the bathroom. We just had to like repaint, uh, with some like mildew resistant paint. Um, so we hired a handyman for that. It was, that wasn't a big deal, but the biggest one was the trees. Um, the house, it wasn't like super overgrown, but there were definitely trees all around it. And, um, I thought it looked fine, but after they mentioned that we came back and we were looking at it and the trees were, you know, in the house onto the eaves and onto the gutters.

34:55Isaac Mann:And so I think it was a good thing, but we had, we asked the sellers you know hey do you guys want to cut down all your trees and they nope we've got backup offers and so um but they said we could come and do it if we wanted and so we were like okay so we showed up so you guys actually cut down the trees yeah it was uh that week was crazy we had um so i used to do events and me and both of my partners we're going to go work an event from friday saturday sunday and our deadline was our financing deadline was friday and so on like tuesday and wednesday i'm like getting ready to leave on this job and we're going over during the day with a chainsaw and clippers and a ladder we're climbing up on the roof of this these people's house and they're like they're pretty the seller's great they're just like super nice they're like yeah man do your thing they bought

35:58Real Estate Rookie Hosts:us pizza one day um so yeah i just think about like cutting down a tree like what if you know you get hurt first of all on their property or the tree like my mind just immediately goes to liability with with anything but that's great that they didn't make you hire a you know licensed

36:22Isaac Mann:tree trimmer they weren't like huge trees like i'm not talking like uh enormous trees they were probably like you know six inches around type of thing and so man i was thinking like the big like

36:36Real Estate Rookie Hosts:oak trees that like grow out you know and like covering you know shade and all that stuff you

36:40Isaac Mann:know nothing too crazy yeah um but yeah we had to yeah like six or seven of them and we got up on the roof and chopped off the first 10 feet. And then we chopped off the set in the next 10 feet. And so it was, uh, it wasn't, it wasn't too bad, but it was, it was a bit of a, uh, crazy week because we had to go and do that. And we didn't know if we were approved for the house yet. That was the thing because we were still dealing with all that financing and stuff. And so it was a situation where we could have gave them a tree trimming and then found out the next day that we weren't going to get the house.

37:20Isaac Mann:So we kind of, yeah, just went for it and it worked out.

37:25Real Estate Rookie Hosts:Well, Isaac, what's next for you? Do you have any future plans for this house to hold it for so many years? Do you plan on buying another property with your same partners?

37:35Isaac Mann:what's the plan going forward we're not planning on selling this house anytime super soon um when all the partners move out i think we'll get a either property management company or just managing ourselves continue to manage ourselves from afar and then we are expecting to get like 1200 cash flow when we do that and so actually one of our guys just moved out uh like like 30 40 days ago and he's so we we filled his room with another renter so right now it's two owners and four tenants and he's actually getting cash flow oh for that room

38:20Real Estate Rookie Hosts:that he that's actually a good way to structure it too so that you're not like stuck living there because you own it if you want to move out you've got the the income from your

38:29Isaac Mann:room that that's cool yeah yeah your guys book the uh the first time home buyers soup really emphasizes the like exit strategies and i actually didn't read that until a few months after i bought the house but i think going into it with the exit strategies in mind is super important and so and so yeah we've got it set up so any of the owners can move out and once their room is filled they'll just start taking a dividend basically. And so when we are all moved out, we all expect to take around 350 a month. And so probably just hold it for a while. As far as looking forward, we are touring a few more houses on Friday.

39:17Isaac Mann:We'll see how that goes. I think this one is a good situation and we won't be able to do an FHA again, but, um, I'd love to get a couple more houses in this area and see what we can do. Um, but I've actually been looking around, you know, Utah is a little bit tough. Like our, the median house price here is like over 400, you know, which is kind of hard to get into, but I was looking in Buffalo actually. I feel like that place is great. I was, I saw one of your guys' reels, and it was like Binghamton, New York. And so I was looking around Binghamton. I was like, wow, this is cheap compared to Utah.

39:58Real Estate Rookie Hosts:The thing you have to – I don't know about Utah property taxes, but that's the one thing that will get you in New York is very high property taxes. So that's one thing to look out for.

40:08Isaac Mann:Yeah, there's a couple things in New York, like the certificate of occupancy.

40:12Real Estate Rookie Hosts:Well, the tenant-landlord laws are very tenant-friendly too, yeah.

40:17Isaac Mann:yeah so um yeah lots of stuff to think about i love thinking about real estate i feel like before we can cut this out maybe but before i uh before we got this place when i was living in my box truck i was just always talking about like dude we gotta get a duplex and live in one half of it and yeah i remember my friend said to me he was like dude you talk about money a lot for someone who's practically homeless. I was like, huh, that's interesting. Yeah, I guess I hadn't thought about that.

40:54Real Estate Rookie Hosts:You got it. You got to speak it into existence, man. You got to speak it into existence. Well, Isaac, thank you so much for joining us today. Where can people reach out to you and find out more information about your story?

41:05Isaac Mann:Send me an email, manmakesllc.com. Yeah, I'd love to chat.

41:11Real Estate Rookie Hosts:And that's man with two N's, right?

41:13Isaac Mann:Yep. M-A-N-N-M-A-K-E-S-L-L-C at gmail.com.

41:17Real Estate Rookie Hosts:Well, thank you, Rookie listeners, for tuning in today. I'm Ashley. He's Tony. And we'll see you guys on the next episode. Hey, Rookies. If you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now, look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener. As a rookie investor, especially if you just got your first deal, it is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal.

41:56Real Estate Rookie Hosts:So head over to biggerpockets.com slash guest if you want to be a part of our show. Again, that's biggerpockets.com slash guest. And we'd love to have you on. Rinse knows that greatness takes time, but so does laundry. So Rinse will take your laundry and hand deliver it to your door, expertly cleaned. And you can take the time pursuing your passions. Time once spent sorting and waiting, folding and queuing, now spent challenging and innovating and pushing your way to greatness. So pick up the Irish flute or those calligraphy pens or that daunting Beef Wellington recipe card and leave the laundry to us.

42:32Real Estate Rookie Hosts:Rinse. It's time to be great. Thank you.