4 Rentals in 7 Years with LOW Money Down (5% - 10% Down!)
Real Estate Rookie
Deep Dive
Why did Chris Young choose real estate as his investment path?
Chris was always interested in real estate, influenced by his grandmother's rental properties. He got his real estate license as a backup plan during his engineering career, which provided him with the knowledge to buy his first property.
How did Chris Young finance his first property with low money down?
Chris bought his first property in Los Angeles for $500,000 with just 5% down, which amounted to $25,000 out-of-pocket. He used a conventional financing method.
What strategy did Chris use to build equity in his first property?
Chris used the 'live-in BRRRR' strategy, where he lived in the property, did renovations, and then refinanced to pull out equity. The property appraised for $735,000 after renovations, giving him $200,000 in equity appreciation.
Why did Chris transition from long-term to short-term rentals?
Chris found long-term rentals too passive and wanted to engage more with the business aspect of real estate. Short-term rentals allowed him to be more entrepreneurial and provide a guest experience, which aligned with his interests in hospitality.
What challenges did Chris face with his short-term rental property?
Chris faced a major challenge when a historic winter storm caused the road to his cabin to wash out, leaving it inaccessible for guests from March to July 2023. This resulted in a loss of approximately $40,000 in expected revenue.
How did Chris differentiate his short-term rental from competitors?
Chris focused on creating a unique guest experience by anticipating needs, such as providing games, DVDs, and a library for entertainment during power outages. He also emphasized privacy and a peaceful environment, which were lacking in more crowded markets like Big Bear.
What advice does Chris have for rookie investors looking to buy their first property?
Chris advises rookies to talk to multiple lenders to understand what they can afford and to consider markets where they have a personal advantage, such as familiarity with the area or unique insights into guest preferences.
How did Chris finance his second home loan for the short-term rental?
Chris used a second home loan with 10% down, which allowed him to purchase the property with low money down. He also involved family members as equity and debt partners to help with furnishing the property.
- Chris's initial interest in real estate stemmed from his grandmother's rental properties.
- He pursued a career in engineering but obtained a real estate license as a safety net.
- His first property was a primary residence in Los Angeles, bought with 5% down.
- He transitioned from long-term to short-term rentals for a more active and creative business experience.
Shownotes Transcript