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The Real Estate Investing Club
Real estate pros share their stories on how they got started investing in real estate and then grew from their first deal to a portfolio of cash-flowing properties. In each episode you'll learn the strategies our guests used to create generational wealth for themselves and their families, and the steps you can take to do the same in your own back yard. Our goal at The Real Estate Investing Club is to teach you the fastest ways to start and grow your real estate investing career in today's market - from multifamily, to self-storage, to mobile home parks, to mix-use industrial, you'll hear it all! Our guests share their career peaks and valleys and the best advice, greatest stories, and favorite tips they learned along the way. Want to create wealth for yourself using the vehicle of real estate? Getting mentorship is the fastest way to success. Get an REI mentor and check out our REI course at https://www.therealestateinvestingclub.com.
The Real Estate Investing Club
π House Hacking to Financial Freedom: How Michael Hoang Retired with Just 3 Properties π°
Want to learn more about investing in real estate? Visit www.therealestateinvestingclub.com
Interested in investing in my projects? Visit www.kaizenpropertiesusa.com
In this eye-opening episode of The Real Estate Investing Club, I sit down with Michael Hoang who shares his incredible journey from corporate grinder to real estate freedom through single-family investing. If you've been wondering how to build wealth through residential real estate, this conversation is pure gold! π
Michael reveals how he achieved the ultimate real estate hack - getting "real estate retired" with just THREE single-family properties. Yes, you read that right - just three properties allowed him to walk away from his demanding corporate job where he was traveling constantly and missing time with family. π
What makes Michael's story particularly inspiring is that he started his journey while working a high-pressure telecom job that had him traveling Monday through Friday every single week. His first move? A brilliant house hack where he and his wife bought a large house in an older neighborhood and rented out the rooms to young professionals. For FOUR YEARS, they lived completely for free while building their investment portfolio! π‘
I was particularly impressed by Michael's commitment to delayed gratification. While his friends and coworkers were buying fancy cars and McMansions in the suburbs, Michael and his wife were driving 10-year-old paid-off cars and living with roommates. Though they faced judgment from friends and family, their discipline paid off spectacularly - they now live in a beautiful suburban home with a mortgage half what their neighbors pay, all covered by passive income from their rentals. πͺ
For those looking to follow a similar path, Michael emphasizes the importance of buying properties "deep" - meaning substantially under market value. The house he currently lives in was purchased off-market at 50 cents on the dollar, allowing him to have a much lower mortgage than comparable homes in his neighborhood, even with today's higher interest rates. π
This episode is packed with practical wisdom about tenant screening, property acquisition, and the mindset needed to succeed. Michael explains how he carefully marketed his house hack rooms to attract the right tenants (young professionals who just needed a place to shower, sleep and study), and how he now uses direct mail to find distressed properties for deep discounts. π§
One of the most valuable insights Michael shares is about lifestyle design. He notes that true wealth isn't about fancy cars or status symbols - it's about freedom of time. As he puts it, "Real wealth and luxury is going to Costco at 10am on a Tuesday" or driving when there's no traffic. This freedom has also allowed him to connect with high-level investors and entrepreneurs who meet during work hours, opening doors to even greater opportunities. β°
#HouseHacking #SingleFamilyInvesting #RealEstateRetired #PassiveIncome #FinancialFreedom #RentalProperties #WealthBuilding #RealEstateInvesting #PropertyInvestment #CashFlowInvesting
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[Music]
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all right welcome back to another episode of the real estate investing club i hope you guys are
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having an absolutely fantastic day wherever you are and whatever it time is whatever it
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time whatever time it is for you it is friday here on the podcast as always so we're bringing
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that friday energy to you guys uh it's a good day because we got michael hong with us on the
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podcast he does burrs flips wholesales buys and buy and holds um you name it so michael can show
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you guys the way if uh if that's something you guys are into if you're into the single family
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strategy which is uh you know most most investors actually get started and stay in the single family
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for good reason because there is a lot of them out there so michael i'm super excited to jump
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into this thanks for hopping on the podcast yeah thanks gabe thanks for having me absolutely um
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i told you before we got on here we always like starting with stories we like to hear how people
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got to where they are so why don't you take us to the beginning of your story in real estate and uh
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tell us how you got here yeah so i was working a full-time job in corporate america um my last job
Michael's story of working in corporate America while traveling weekly and his motivation to get into real estate
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was in telecom and i was traveling every single week monday through friday i was in a different
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city every week east coast west coast midwest and um my wife was in school in a master's program and
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she said "as long as i'm in school you do whatever you want but whenever i get out it's time for you
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to come home and uh maybe start a family." and so uh yeah and so i was only for like eight years i
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was only in i'm in houston texas but i was only home here in houston and texas for eight years
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only on weekends and holidays m and so that was a big motivator for me to get started in real
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estate and so man i i tell a lot of people getting started like do not tell me you don't have time
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because i was doing it while traveling with a high pressure full-time job but our first deal was in
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house hacking and so i got to give all the credit to my wife for this um because not all not all uh
First deal: House hacking by renting out rooms while living in the property
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partners would be down for this um but i told my wife when we got married here's my plan and we're
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going to do real estate i'm going to start with a house hack and she was all in on it um so typical
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house hack people are looking for a 2 to four unit property live in one unit rent out the others or
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a house with a lot of bedrooms and rent out the rooms so we were running out of time on finding
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that first house hack and so we um ended up buying a large house in an older rougher part of town
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with a lot of rooms and we rented out by the room and the original goal was let's just have half the
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mortgage covered we can save more invest more but through the miracle of real estate we were living
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for free in our first house hack and for about four years we lived in that house uh for free and
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that kind of you were renting out the rooms and you were living in the in the house so you were
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essentially roommates with the your tenants that that's that is correct yeah that is the ultimate
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house hack i love it we did that we did that for four years and it just supercharged our strategy
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you know she was working part-time and in school full-time i was traveling we were hardly there put
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cameras on the house not as scary as it sounds um well i'm sure you guys were were very um diligent
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about who you accepted as tell as as tenants i mean if you're going to be living with them you
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were uh you were you know giving them a a second second look over when you're making that decision
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yeah uh it it all comes back to like marketing and advertising you get what you ask for and
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so you have to be careful with fair housing laws everywhere you live but a real estate broker told
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me if you're living on property uh and it's your only unit fair housing doesn't apply to you um so
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you're looking for people that kind of live your lifestyle so i would just put an ad like we're
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not a put our feet on the table and drink a beer together in the living room kind of environment
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we actually staged the the the the the rooms for young professionals with like desks and chairs and
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stuff like that um and so you kind of get what you ask for so we got a bunch of young professionals
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either just getting out of or just getting into a master's program and they just needed a place to
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shower sleep and do homework so it was wonderful we did it for 4 years looking back i wish we
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would have did it longer and then we started buying single family rentals while we were
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um house hacking and while i'm working and she's going to school and she's also working and it was
How Michael and his wife prioritized building wealth over appearances, living frugally while their tenants had nicer cars and homes
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a situation where the house i'm standing in right now we you know we no longer have roommates we're
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living here and as this was going to be one of our rentals and i was underwriting it and i'm
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like like babe are you ready to move and not have roommates anymore cuz we can live in this
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house and the cash flow from our other properties was enough to pay for this mortgage of this house
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so we transitioned from living for free with roommates to living for free in our own house
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in the suburbs and um i just want to kind of let everybody know that there's a narrative out there
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about real estate investors that we're some evil wicked you know scrooge mcduck on top of a hill
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but that wasn't my wife and i's experience because we were living in an older home in an older
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rougher part of town we might have heard fireworks at night that were not exactly fireworks we d we
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were driving yeah we were driving 10-year-old cars that were paid off and then i was driving
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from the inner city on to an older part of houston out to the suburbs to the west side of houston
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where everything was new and nice and pretty and our tenants our residents that were living
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in these homes they were living in newer nicer properties than we had they were they had like
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nice new mercedes and bmw i had tenants saying "well if i can't park two cars in the garage i
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can't rent from you because my cars don't park on the street." and it was like my my tenants like
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"well this is not the house for you buddy." yeah and so our tenants had nicer cars than us living
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in a nicer house than us while we were doing what was necessary to get our real estate um
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uh career off the ground and but you look at these people's like credit report and their application
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and like their credit shot they have no savings they're trying to not give you a down payment
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and so i encourage everybody who's listening don't look at like the surface level of people
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when you're trying to determine who's successful and who's not i found so many of my tenants
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uh are just trying to live like their parents did is right out of college or they're in their 30s
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and 40s and they're not building any wealth or in tons of debt and so we kind of got a lot of flack
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from our friends and family that they were either in really nice apartments in exclusive parts of
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houston or they were buying a house immediately in the suburbs as soon as they started working and we
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were living with roommates in an older home that uh the home was beautiful on the inside um and
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we're driving older cars and people were kind of looking down on us and it doesn't matter because
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now my mortgage in this home that i'm standing in today is like half of what my neighbors are so i'm
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living in the nice community now the nice suburb community i have passive income that's paying for
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my cost of living here i'm living for free i no longer have a job i've been uh real estate retired
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for over a year now kind of going on a year and a half now and our life looks completely different
Michael's transition to "real estate retired" status within the past year and a half
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we bought this house offmarket 50 cents on the dollar so our mortgage is almost half of what
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our neighbors are even with higher rates um and so i would encourage anybody listening to this
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like do not worry about what your friends and family's life look like worry about your goals
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because we had a goal setting exercise we reviewed it every year together budgeting i used to do an
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annual budget annual review i learned you got to do that more frequently now so like once a
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quarter is really good and we just had our goal set and um we are now living a life six or seven
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years into my real estate journey uh we are living a life completely unlike anybody all
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around us um because we didn't get a huge house and we didn't get the very nice cars as soon as
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we became like you know working professionals and so um that's kind of where we got to where we are
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today gabe yeah no i love it you guys have been diligent you've uh you've kept your no what's the
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phrase nose to the grindstoneone or something like that and you've uh you've kept making the
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wise decisions going forward i love house hacking as a strategy um i feel like that is such a such
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a good way to go about it i did it when i first got started i bought a duplex lived in one side
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rented out the other and um you know uh renting out each individual room is like another level of
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that so i think uh that's a really good way to get started um and you're right i mean i feel like it
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you should never ever really look at what other people how other people are living um just live
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your own life i you know i'm 38 years old i'm i'm successful in real estate and i still drive
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my uh the the two toyota camry that my dad gave me so many years ago 2003 toyota camry you got
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to have a beater it's just so nice to drive drive a beater car and just make around town i've i've
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bought a nice car before but it was uh you always i always felt nervous about scratching it and so
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just just keep those old cars and and do what you got to do um all right so you made it out you are
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real estate retired as you mentioned um so tell us about your strategy today uh you like you've
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mentioned burrs you've mentioned wholesales what is it that you guys are trying to do how do you
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see your career evolving from this point so for the last year or so i've been in a mentorship for
Current focus on transitioning to multifamily investing and the importance of networking
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multif family so transitioning you want to give that one a shout out uh yeah lifestyles unlimited
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in houston tech they're nationwide but i'm here in houston texas they have an office here um great
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company uh great mentorship uh people with there's people in there with billion-dollar portfolios
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that you've never heard the names of they're just quiet professionals it's a great organization
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um and uh so i i can teach single family i'm a student of multif family um and i'm still looking
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at single family deals i have wholesalers sending me deals all over harris county where i live now
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um and if anybody has a deal out here in harris county and you want me to take a look at it just
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dm me on instagram michaelbome11 and i'll take a look at that deal um but also doing direct mail
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uh where we send direct mail to distressed uh residents that might want to sell their
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property for cash quickly um and uh doing a lot of networking um going to a lot of events i i got to
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tell you gabe one of the things that i've enjoyed the most uh we love making money and we love doing
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deals i've enjoyed not having a job monday through friday this is like what real wealth and luxury is
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you know what wealth and luxury is to me going to costco at 10 a.m on a tuesday that is luxury
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and that is what or being able to not drive through traffic uh being able to drive whenever
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you want and also i've learned you meet a lot of interesting people when you are not grinding at
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a job monday through friday 9 to5 a lot of the multif family events and a lot of events with
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sophisticated or accredited individuals happen at like wednesday at 1 pm or like a friday morning
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and so i have been introduced to a whole new world of people by being liberated from the need of a
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job yeah um and i've really enjoyed like i was at the houston club last night with a gentleman
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named chris bounds who runs something called the passive wealth club here and we got to go hang
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out in rooms where george bush senior and barbara bush's photo uh portraits are on the wall and it's
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like there's rooms dedicated to them and i've been going to like exclusive clubs and venues and just
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meeting some of the most interesting people in the world i thought george bush was from dfw he is
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he from houston uh don't know where he's from but the houston club here um has a whole area he was a
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member of a of a it was um of a men's club well it it's no longer a men's club anybody's welcome but
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it's what we would call you know 50 years ago we'd call it a men's club and um you know i've just
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been able to meet the most interesting people and my friends group has totally changed and it kind
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of felt like at first when we were on this journey we were kind of isolated on an island um and
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everyone was kind of judgmental of us and they're they're worried about working twice as hard at
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their job to get like a $10,000 raise at the end of the year in which case they just leveraged with
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like credit card debt and automobile debt and home debt so what are they really earning or saving and
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we were kind of like uh like an outcast in our friends group but we've made like a completely
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different friends group now that are trying to build us up add value to us find ways like i just
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love being around entrepreneurs and other real estate investors all you do is sit back have a
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drink and talk about what other people can do to you for free like just helping connecting with
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people and so that's kind of been my hobby right now is just networking as much as possible still
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looking at deals um talking to private lenders um talking to sellers and um so multif family is your
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that's your future goal that's what you're you're looking to get into um correct so again going back
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to that real estate retired thing it sounds like that's relatively recent for you you know last
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year you were able you were able to leave your job um for people who are currently in their 9 to5 and
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they're looking to get to that give them a picture of what it took um so what what did your portfolio
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look like what was your net your your um cash flow uh that allowed you to leave what what was
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it that allowed you to get from 95 to real estate retired i love that so this number is different
Discussion of what it took to become "real estate retired" - just three deep-value single-family properties
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from everybody but be while me and my wife were kind of grinding uh we were playing this board
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game called uh cash flow by robert kiasaki yeah so the cash flow board game it's available on amazon
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and we kind of realized that when you draw cards you draw character cards at the beginning of the
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game it's like you might be a lawyer with a high salary you might be a mechanic or janitor with a
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low salary and then everyone's like "oh i want the the lawyer i want the engineer i want the doctor."
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what you realize is when you draw the the low salary cards it takes less properties for you to
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reach your your real estate retirement goal and so um i don't know what real estate retirement
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means gabe because when i had enough properties to cover my cost of living and my utilities and
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my gas money and my groceries and everything i consider myself real estate retired i went to like
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um so what was that number for you i know it's different for everybody um everybody comes from
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a different position but for you what was it yeah it's different for everybody um i really bought
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properties really deep and so for me it just took three properties in the suburbs yeah a very small
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amount of properties and those are single family yes those are single family and for most people
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this is not that number is not going to make sense for you um for most people it's not and
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uh well i mean you i think for most people it actually you could do it with three single
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family you couldn't do it with three standard long-term um stay single families but if you
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bought three single families that had multiple rooms you did the rent by the room you do
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uh short-term rentals um you do furnish rentals any of those strategies uh you could definitely
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definitely replace a salary you know i don't know what a standard what is it like $4,000
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$5,000 a month um with that type of you know three three properties um so i i feel like three is that
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is a number that anybody can achieve and uh and that will allow you to make not a cush life but a
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decent a decent living on um on three properties so yeah i think that's a that's a good number
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to put out there yeah and that also accompanied with us with our primary residence we live in now
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having a very low mortgage buying it deep under market value and having a very low mortgage for us
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but what that enabled me to do is stop traveling i cashed out my 401k and we've sold a couple
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properties since then i've passively invested in some multif family i haven't been like the gp or
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like the lead investor on a multif family yet but i've passively invested some multif family and
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um we have just uh gotten really like what is real estate retired some people go and sit on the beach
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man all i want to do is just find my next deal and next adventure so it went from me like working a
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job i had to work and then working a deal a real estate deal i felt like i had to work to now it's
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like you kick your feet up on the desk and you're like "let's look let's underwrite a deal let's go
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walk a property." like it's it's like a sport to me it's the funnest thing in the world it the lens
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that you view the world and is completely changed when you're no longer relying on a nine-to-five
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job in order to pay your bills nice well again congratulations on getting that that's a big uh
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a big step to achieve a big uh goal to achieve as you said it's the first of many goals that you're
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going to be setting for yourself but uh it's definitely in my opinion the biggest one when
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you can leave your job um with your real estate career i remember doing that i don't know how many
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years ago but it was uh it's a big moment so it's something that definitely should be celebrated and
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um you know i'm excited for your future going forward in multif family uh with that said we
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have run down the clock so it is time to jump in the quick question round are you ready i'm ready
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all right starts with education could be any form could be a book a conference a mentorship program
Quick question round begins with book recommendations
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movie whatever i just need two recommendations one for general life wisdom and then one for
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real estate man we everyone's got to start with rich dad poor dad i'm sure you've heard that a
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thousand times on i have i have a podcast the be someone podcast with michael hong all my guests
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they always bring it up so then i ask them give me a second one if you mention rich dad poor dad so
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for me my second one is um who not how uh the book by dan sullivan um great book everything i've ever
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done in my life i learned i need to ask not uh how but who like who not how um and then i would
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recommend everybody who's just getting started there are free real estate groups all around
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you that do meetups type your city into facebook whatever if you're in st louis missouri st louis
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missouri meetup group or austin texas or whatever wherever you're at um meetup.com has tons of great
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meetups and uh there's a local ria around you bigger pockets has local meetup groups and uh we
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have tons of them here in houston and so you need to be filling your calendar with meetup groups you
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need to be listening to podcasts and audiobooks and um grab those two books that i mentioned
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perfect i love it all right next question is for your younger self let's go back to the michael
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um not so many years ago who was just starting out just uh thinking about you know he was flying city
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to city monday to friday and he was thinking about leaving it finding something else um and he kind
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of landed on real estate go back to that version of michael uh look him in the eye and give him one
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piece of advice moving forward michael you do not need four or five years of podcasting audiobooks
Advice to his younger self: "Don't wait years - get started right now"
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and meetup groups before you buy your first deal you need to get started right now when i got my
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first house hack it's because i didn't think i could have a rental and when i got my first rental
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it went in first as i was going to wholesale the deal and having the right network around me turned
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that into actually talk to this private lender you can probably flip this thing and i'm like i can
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flip a house and i take it to my private lender and he looks at it he said "yeah i'll fund it as a
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flip can you keep this as a rental have you talked to a conventional lender?" i'm like "no i thought
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only like millionaires and billionaires got to keep rentals i thought if i wholesale enough one
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day i could flip if i flip enough one day i can own rentals and then i took it to a conventional
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lender and they're like the lady was like "sweetie you bring you bring me 10 of these i can get all
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10 of them financed in your name then we're going to put 10 of them in your wife's name and then
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we can go with a different loan product and give you as many as you want keep finding these great
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deals." and so it's just all about having the right kind of network and the people around you
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there you go all right uh next question is about finding deals um it all starts with getting in
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contact with the seller and penning that purchase agreement so what is your favorite way to generate
Michael's preferred lead generation method: direct mail campaigns
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leads and find new deals i haven't found a better way than direct mail um it's always works there's
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been changes in regulation with cold calling text blasting ppl ppc seo regulations have changed
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direct mail doesn't change also doornocking is never going to change you're always allowed to do
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that um and if you don't have the budget or you're afraid to do any of that just network with some
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local wholesalers dpl is hot right now everyone i know is doing pay per lead that's fine it works
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i've used it it works but you just can't beat a really good targeted direct mail campaign yeah
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yeah i've actually um i've done tons of direct mail in my my career but i have gone away from it
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recently just because um cold calling i just feel like you can't beat it all well i know we're doing
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uh we're not doing single family we're doing commercial and so it might be a little bit
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different but um for some reason i just love cold calling direct mail has just gotten so expensive
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and i'm just uh i'm tired of the you know $10,000 a month in in mailers um but if you have success
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that's really all that it comes down to if you're if you're getting deals on your direct mail then
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keep it going uh it doesn't matter you know if you have a return on your money that's that's the
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thing that matters and so um that's good leads us to the next question this is about lessons
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learned not every deal that we get into goes the way we expect it in fact many times things go
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wrong and uh we get to learn a lesson so what was a deal that went a little bit sideways for you and
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then what was the lesson you pulled from it your rehab is always going to take longer and cost more
Lesson learned: Rehabs always take longer and cost more than expected
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than what you think it is um never believe what the contractor tells you contractor tells you 3
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weeks to get this done you say "great i'm going to give you four weeks." and on top of that every day
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you're late i'm going to deduct $100 but every day you're you're early i'm going to give you
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another hundred then they say "well actually i think let me get six weeks." and then you get the
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real number out of them so i've had rehabs take longer it cost more money than originally intended
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um but it's okay we still made money on the deal and uh we've also had um when we go to sell like
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when when the tenant leaves we freshen up the house we go to sell it we've also had that take
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longer so just remember there's a carrying cost to everything um taxes insurance a mortgage payment
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um but uh we learned from everything and we've still made money on all the i haven't i haven't
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taken my big loss that people say "oh you know it's going to happen eventually i haven't had my
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big loss yet." um so things have been going great for me that's awesome man hopefully it keeps going
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that way um all right that leads us to the very last question this is for the listeners you've
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given us a lot to think about i'm sure people want to reach out get in contact with you um this is a
22:33
two-parter where can they find you and then what can they expect when they reach out so i talked
How to connect with Michael through his podcast, Instagram, and direct contact information
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about my instagram michael bome on instagram um on my podcasts on youtube spotify apple podcast it's
22:45
u the be someone with michael hong um i also give out my phone number on every podcast
22:51
cuz no one's given me a reason not to do this yet so please don't be the first one uh call
22:56
uh text me do not call me because i get so many spam calls i won't answer but it's
22:59
832301-9672 and when you reach out to me either um have a deal under contract or that you want to
23:11
review or have a uh very pointed question that you can't just very quickly google um and there's also
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a free facebook group if you go click on the link in my description my instagram where we're posting
23:24
uh deals and questions and live videos in there as well um so yeah that's where you can find me
23:31
perfect i'll put that link in the show notes so if you guys want to reach out all you got to do
23:35
is just click the little more in the description it'll pull down that full description and in
23:39
there you can find michael's links all right man that wraps it up thank you very much for
23:44
hopping on the show thanks gabe absolutely for everybody who's with us today thank you guys for
23:50
showing up you are the reason we do this so if you guys have any questions reach out to
23:53
me gabe at the real estateclub.com if you guys want to support the show just leave us a review
23:58
other than that i hope you guys have a great week great day and uh keep rocking real estate
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