How I’m Living Rent-Free in the Most Expensive City in America (Using House Hacking!)

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As co-host of the BiggerPockets podcast, I have the privilege of speaking with successful investors on a weekly basis. Brandon Turner and I dive deep into their stories and noticeable patterns tend to emerge.

Among many of those who have seen success, there’s a common denominator: they got their start house hacking.

What is House Hacking?

House hacking can be done in many ways, but at its core, it’s the concept of buying a property to live in while using part of it to generate income. Depending on where you live, there are different opportunities, strategies, or techniques to execute this concept.

What won’t change, however, is the impact it can have on your financial life and the doors it can open. Namely, it’s a way to ease yourself into the world of real estate investing.

A House Hacking Success Story

In addition to hosting the podcast and investing, I’m a real estate agent. I’d like to share one of my client’s success stories.

One day Ryan Meinzer heard Brandon and me talking about house hacking on the podcast. He decided to do what many others do not: take action.

After calling to let me know about his plan, Ryan and I went to dinner. We broke down his goals, his strategy, and his understanding of what he was trying to accomplish, which was to buy a property in uber expensive San Francisco without having to pay through the teeth for it.

That conversation became the first step on a journey that would ultimately lead to Ryan finding a massive deal, adding big value to it, and living for somewhere between cheap to free in the most expensive city in the country.

Think this is all hype? Not for Ryan, it wasn’t!

His determination, intelligence, and can-do attitude led to him hitting a home run on his first try. To make it even better, Ryan has agreed to open up his playbook and share a lot of what he did to make this possible.

The following is Ryan’s account of his story, his thought process, and his ultimate success finding a property that paid for him to live in the city he loves. It was a move that simultaneously opened the door for more deals, more wealth, and more real estate!

So, if you’ve ever been thinking about house hacking yourself, learn from and be encouraged by Ryan’s journey!

Living Rent-Free in the Most Expensive City in America

An Investor Tell-All by Ryan Meinzer

My story isn’t unique. All that’s unique is that I finally put my mind and money where my mouth was. It’s what enabled me to live rent-free where I left my heart: San Francisco.

I’ll first share the house hacking process by which I accomplished financial freedom through real estate. Then, I’ll provide an overview of how I found the rare deal I knew my agent David Greene and I could win in one of the most competitive real estate markets in the world.

After dumping money into thin air (rent) for 15 years, I decided that enough was enough. I set the goal of living rent-free through real estate.

How? By house hacking, which to me meant making the sacrifice to live with others at age 35, in order to have them pay my mortgage.

I had heard David on the BiggerPockets podcast talk about this concept time after time. There’s no complicated financial algorithms involved in the process. The idea is to find a place you can afford to buy where the rent you can charge your roommate(s) will exceed your mortgage.

In San Francisco, this is not too difficult. Rents are the highest in the nation, and demand is through the roof.

House hacking inherently requires sacrifice. It could be sharing a bathroom, wall, and/or kitchen with a roommate. In my case, it was all three.

I began by utilizing some of the principles of BRRRR, retrofitting an open living room into a private bedroom. These are definitely first world problems, but sacrificing a bit of privacy required a big mind shift for me, as I had been so used to living in studios (and living with OCD) for the past 10 years.

I got over it within a few months by letting go of full control, which turned out to be quite liberating. Who would have thought sharing a toilet with someone would be a blessing in disguise?

Many investors have rigid perspectives about real estate. They believe a property is either an investment property (rental) or a luxury expense (primary residence). House hacking allowed me to take a luxury and make it a sound investment, combining both worlds and growing my net worth considerably in the process.

If you look at the return on investment (ROI) on my down payment and consider how much money I’m saving a month on my previous living expenses—not to mention factor in principle reduction and tax savings—it becomes crystal clear this move not only allowed me to live where I want, it was also an amazing investment of capital.

Time was my most valuable asset in finding the deal. I gave myself a full year to research the market and prepare my finances accordingly. From living in the city for five years and renting out five apartments on Airbnb, I knew every pocket of San Francisco fairly well, along with its respective rent yields.

What I didn’t know was how competitive the market to buy was and how exactly to win deals. Unsurprisingly, I vastly overestimated the number of “house-hackable properties” there were available.

I also quickly realized that only millionaires or DINKs (double income, no kids) were winning deals on such properties. They did so by offering upward of 20 percent higher than the property’s asking price.

As a single guy who wasn’t a millionaire, how could I be competitive in that market? I needed more than money.

Finding a deal for me meant finding a very rare type of property in San Francisco, one categorized as tenancy in common (TIC). In short, a TIC property is owned through a legal partnership by individuals. Those individuals then have a separate agreement to designate which areas/units of an entire building are owned and occupied by whom.

As TICs are unconventional, they require non-conventional financing (as opposed to conventional mortgage loans) offered by merely a few banks with extremely strict underwriting requirements, including exceptionally high down payments and credit scores. This makes TICs drastically harder to finance/buy and thus reduces the seller’s price by as much as 20 percent below the market compared to a standard condominium.

Voilà! If I could finance a TIC at asking price, I could afford it. Plus, the majority of the competition would be weeded out, unable to bid.

Classic view of historic traditional Cable Cars riding on famous California Street in beautiful early morning light at sunrise during summer in San Francisco

Now all I had to do was save, build my credit, and find a TIC. So, over the course of a year, I saved by reducing my spending as much as possible and built my credit by all the standard means.

Although it took David and I nearly six months to find my TIC, it proved to be the easiest part. We were laser-focused on finding a niche property with non-conventional financing that was outside of nearly everyone’s scope.

It’s easy to question this complex process and worry about what could go wrong. It’s no coincidence that I waited a year and did a ton of research before feeling comfortable.

As he mentioned previously, prior to moving forward, I met with David to go over my strategy, look at potential hiccups, iron out some smaller details, and make sure I understood the contracts and due diligence involved in the sale. I think this is an important step in covering all your bases.

But now that I’ve done it, I encourage everyone to house hack if they can. I also recommend they find someone familiar with the process who can look over their plan and address any issues they might have missed.

In real estate, it’s what you don’t know that can hurt you. So, having a professional set of eyes look over your deal is a great way to reduce your risk. It’s also free if you’re the buyer!

Currently, I live happily ever after in my favorite city in the world by having roommates pay my mortgage. I won the rare property deal I found through research, time, and fiscal responsibility.

I’m currently in the process of converting my TIC into a condo, a move that will cause it to appreciate by up to 20 percent overnight. It’s a value add that will take this deal from great to super great—but that’s a blog post for another day.

What I Love About Ryan’s Journey

It’s me again, David, with my final thoughts on Ryan’s journey.

Ryan didn’t just hear about a cool strategy and sit on it. He immediately reached out and started taking steps to act on it.

When problems came up during escrow (which they always will), Ryan didn’t let it deter him or make excuses to quit. Instead he systematically broke down each hurdle into smaller obstacles, and we put our heads together to determine the best way to overcome them.

Ryan looked for ways to make the deal he found happen, as opposed to looking elsewhere for one so easy he wouldn’t have to think.

If you’ve ever wanted to own a home but didn’t want to acquire the mortgage that comes along with it, I encourage you to consider this strategy! Real estate investing is all about building wealth through investment properties, and there are many creative ways to do just that.

Thirty years from now, Ryan will own a multi-million dollar asset that has been paid off by his tenants and generates strong, healthy cash flow every month. By taking advantage of his resources today, he’s securing himself a better tomorrow.

Could you be doing the same? If you don’t think a house hack is for you, which other method of investing would you be willing to try?

Let me know in a comment below. 

About Author

David Greene

David Greene is a former police officer with over nine years of experience investing in real estate that includes single family, multifamily, and house flipping. David has bought, rehabbed, and managed over 35 single family rental properties, owns shares in three large apartment complexes, and flips houses. He also owns notes and shares in note funds. A nationally recognized authority on real estate, David has been featured on CNN, Forbes, and HGTV. Now the co-host of the BiggerPockets Real Estate Podcast, David has a passion for teaching and helping others grow wealth through real estate. In 2016, David started the "David Greene Team" and became the CEO of the top producing Keller Williams East County team as well as the top producing real estate agent. The author of Long Distance Real Estate Investing and Buy, Rehab, Rent, Refinance, Repeat, David has won several awards including second place for real estate book of the year awarded by the National Association of Real Estate Editors (Long Distance Real Estate Investing).


  1. Chester Lee

    hi David. Good article.

    <> <>
    ACTION is the difference between knowledge and success. A lot of people dream big, but the only ones to truly achieve it, are those who take action.

    Its interesting, to me at least, to see that people often comment that there are no opportunities to make money in real estate because entry requires a lot of money, or deals are too hard to find, or I don’t have the time or knowledge or skill set to to do that stuff. Here is a typical conversation I’ve had many times with co-workers, friends and people I meet at local RE investor meet-up.

    Co-worker: Your rich now right? You take time off to go to seminars and training but I never hear you talk about vocation for leisure.
    Chester: I’m not rich. far from it. I have 4 mortgages, kids in college, and elderly parents I’m responsible for. I pay kids tuition, and help with rent for my parents.

    Co-worker: How could you afford all of that?
    Chester: passive income from RE investing. You can do what I’m doing. I explain about private money lending and how my borrower is paying my 10 to 12% annually, roughly 1% a month. The loan is 6 to 9 months, secured by a 1st deed of trust against a property.

    Co-worker: I don’t know anything about that.
    Chester: I’ve been working with these folks for a while now. It’s all legit and documented. They will notarize the paperwork, and file it with the county clerk. On record, you are the lien holder. Every month, they ACH the interest into my back account.

    Co-worker: I don’t have any money right now.
    Chester: you told me you had 50K saved up, for XYZ.. After 9 months, the notes are due, and you can ask for your money back, or go month to month. All they need is 30 days noticed to close out the note and circumvent future payments in their automated system.

    Co-worker: What if X happens, What if Y happens, What if Z happens?
    Chester: let me make an introduction, and you can ask these questions directly to one of the partners of firm I work with. They can show you their documentation, and explain their process.
    Chester: sends emails and makes an introduction.

    Chester: days past. So, co-worker. Did you call Kent and meet with him?
    co-worker: no

    Chester: weeks past. So, co-worker. Did you call Kent or request to see sample promissory notes and documents?
    co-worker: no
    Chester: If being the bank, and lending money isn’t your thing, I also know a company that does turnkey properties. For a cash on cash investment, you can net ~10% before taxes, and 15 to 20% if leveraged. You own the property and they do all the work.
    tell me more.
    Chester: The Company I’m working with is in the midwest. The properties are also in the Midwest. Chicago, Detroit, and suburbs in the Michigan. I’ve been with them for a few years now. Cash flows are all on target. I’m pleased with their service and service levels. Keep in mind, this is a longer term investment.
    co-worker: This all sound great. please make an introduction.
    Chester: sends emails and makes an introduction.

    9 out of 10 times, nothing happens. The opportunity/investments are available, the contacts are there. References are available. They have enough capital to start. What was missing was action and commitment to action. On the rare occasion, one of my friends will say..

    Friend: I Chester. My husband and I want to meet you for lunch to discuss the turnkey properties. Are you free sunday?
    Chester: I eat everyday, several times a day. Sunday works. How about Kitaro Sushi on 5723 Geary Blvd, San Francisco.

    Friend: tell us about these turn key properties. Lots of questions asked.
    Chester: Answers all of their questions. I’ve emailed you their inventory of homes from their latest listing. I’ll follow-up with them to see if there is a newer list.
    Friend: well discuss and think about it.
    Chester: Let me make an introduction, and you can take it from there. If you want to move forward, Let me know if you want me to fly out to Michigan with you. I’d be happy to.

    Friend: Hey Chester, Hubby and I are available these dates. Please coordinate with the turnkey provider.

    fast forward several emails and calls and travel arrangements.

    Chester: Hello turnkey provider. My friends and I are coming to see your operations, tour these specific addresses. We will be there on this date.
    turnkey provider: glad to have you. We’ll arrange transportation from the airport (DTW) to our office. travel safe.
    Chester: Everything is set. I’ll park at your place, and we can drive to OAK airport together.

    Chester: have you closed yet?
    Friend: We are buying 3 properties and financing them. It takes a while to get everything done.

    A few months later.

    Chester: How are those properties in MI going? Any issues?
    Friend: My husband is handling it all. no issues. nothing to do. Money is ACH into our account every quarter.
    Chester: once everything is in place, its a cash flow machine.
    Friend: Yep
    Chester: you have enough cash flow to add a property to the portfolio about once a year if you wanted.
    Friend: Our son just started school at UC Berkeley. Now we have 2 kids in college.
    Chester: maybe you should sell one of the Tesla’s. LOL
    Friend: LOL
    Chester: Let me know when you want to invest in syndication in multifamily or self storage. I know a guy.

    Point being, Most people will not take action, even in the face of opportunity and knowing someone (me and my friend) who are already invested with those opportunities.

  2. Katie Rogers

    I hope David didn’t tell you “It’s also free if you’re the buyer!” That is standard agent spiel, but it is not correct. The money that pay the commissions of both the buyer’s agent and the seller’s agent comes from the buyer, passes through the seller’s hands (even if only on paper), and then goes to the agents.

  3. Katie Rogers

    I wouldn’t be too hard on the people you believe do not follow through. They generally have their reasons.

    Private lending also has its risks. One of my clients was paying faithfully for quite a while, but suddenly and unilaterally put their house on the market and started paying interest only. I’ll get my principal when the house closes, but gee.

  4. David Greene

    This is a common misconception made by the inexperienced.

    The commissions are paid by the seller, and negotiated by the listing agent.

    The seller receives the funds, and the negotiated amounts go to the agents, title company, escrow company, home warranty company, etc.

    The listing agent negotiates a commission to sell the house, and then gives a chunk of that money to the agent who represented the buyer as compensation for helping them sell the house.

    It’s much easier to sell a house to a buyer represented by an agent who can help them understand what’s going on, so the listing agents are willing to give up part of the commission THEY NEGOTIATED to the other side.

    I’d hate for people to be under the impression they are paying their buyer’s agent-they’re not. If they were, buyer’s agents would not routinely be getting short changed on their commissions, as the majority of the time they make much less than the listing agent does. If clients were buying their buyers agent, the agent would be determining what they get paid and the buyer would be paying it into the escrow.

    There ARE some models where the buyer’s agents ask their agents to pay their commissions, and the buyer pays it as part of the closing costs. In these scenarios, Katie would be right. As it stands right now, the buyers agents only get what the LISTING agent, not themselves and their clients, are willing to give them.

    There are a lot of naysayers in every industry, including real estate, and it would be very sad to see people miss out on opportunity because of them!

    Also, I agree everyone has their reasons for not taking action. Those reasons are what hold people back from wealth, prosperity, success, a better life, and virtually every reason they are on BiggerPockets in the first place! Let’s not make excuses for or glorify the reasons we tell ourselves to not take action. Let’s focus on overcoming those reasons so we can accomplish our financial goals!

    • Katie Rogers

      That explanation about commissions goes around in circles only to end at the same point. The commissions that the seller pays comes from the money the closing buyer provides. In that sense, it is very possible for a buyer’s agent to work for a buyer for quite a while without getting paid by anybody. In fact, buyer’s agents have been known to pressure their clients, “I have shown you ten houses. Pick one,” Lots of buyer’s agents abandon their client, and never call if the buyer does not make an offer on any of the houses they may have seen on their first outing together. They would rather the buyer settle for a house they don’t really want. In other words, they are looking out for their own interest over the buyer’s interest which is a violation of their fiduciary duty to their clients.

      Furthermore, commissions do affect the market price of a house. Ask any FSBO owner who thinks they are going to save on the commission only to find out that nearly every prospective buyer expects a discount because there is no commission.

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