Meet my friend and fellow real estate investor Mike Glaspie. Read on as Mike describes an incredible deal he’s got and tells you why investing in the BiggerPockets community will net you, as I like to say, infinite returns on investment.
It’s all about people! Find out here why it’s truly so good to invest in people.
What’s going on, guys? It’s Mike Glaspie, and I’m a local real estate agent and investor right here in Fayetteville, North Carolina. So I’ve been in the military for the past 11 years and I just recently separated. But when I first started my investment journey, BiggerPockets was the only thing that I had.
When I first started investing, I had to find a creative way to invest because I didn’t have any money. So, the first place I went was the BiggerPockets community. I heard about it through a podcast at first. Once I really started to dive in and listen to Brandon Turner and Scott Trench and Josh Dorkin and all of their insight, I really started to see that there were a lot of creative ways to do real estate.
The first thing I realized that I needed was somebody who knew the area pretty well. And the first stop for me was finding a Realtor. Lo and behold, I found my partner now, and she’s helped me so much just getting started on that aspect of the entire process, finding the properties and things of that nature.
But then, I started to identify gaps. And you need a full team around you—not just a Realtor—a property manager, a contractor, a wholesaler for these off-market properties to lower the competition.
Not only did the BiggerPockets community help me, but it also allowed me to point myself in the right direction. I went to local meetups. Once I had the network of people, all I had to do was implement the systems and the tools that BiggerPockets had to offer. Lo and behold, BiggerPockets has helped me find my financial freedom.
Moving forward from there, I started taking it one step at a time, one bite at a time. And although I thought it was going to be this super difficult journey to make it all the way here, it’s just consistency. Consistency compounds.
Nothing about real estate—nothing about anything—is truly easy. But if you’re consistent, you will see it pay off in the end. And so today, let’s talk about my house. I live on one side, and I house hack the other side via Airbnb. I acquired this property via subject to.
House Hacking via Airbnb
Now, the reason I chose Airbnb over a long-term rental is because it’s a little bit more money. One of the difficulties I faced in the beginning was the high turnover rate. So, I’m a firm believer that you leverage your weaknesses and you highlight your strengths. Therefore, I found a property manager to take care of this for me. That’s true passive income.
Transitioning out of the military, it became more and more important for me to reduce my living expenses, so I knew that house hacking was probably the right idea. Then I had to actually find a deal that I could house hack.
Finding the Deal
As I went through the process and I was looking for multifamily or maybe a big house where I could rent out other rooms, matching my price point was getting more and more difficult. Being in a military town, we often have to move or are forced to move by the military. We call it a PCS or a permanent change of station. And sure enough, there was a couple that needed to move clear across the country.
The BiggerPockets community really opened up my eyes to the power of networking. So when we created our local network meeting here for real estate investors, that’s actually how I was introduced to the couple. They came up to us and they told us their situation. And so once we ran through the numbers and realized that to sell it, they would actually have to come out of pocket, that’s where the creative solutions came into play.
Creating a Win-Win Buy & Sell Scenario
Ultimately, they had a huge problem that they needed to solve. Once we were able to piece it all together and show them the options that they had, they started to get a little bit more excited. But they were uncomfortable with it because it was new.
In order to mitigate that risk and build that trust, not only did we show our presence and our professionalism through the consistent actions that we took previously, but we also brought in attorneys. We also involved other partners to cover any legal risk that might come up to make sure that they had all of their bases covered.
The Numbers Behind the Deal
Let’s get down to the numbers. When they were moving, they actually owed roughly about $116,000 on this duplex. But they didn’t just need the mortgage covered, they needed a little bit more wiggle room for moving expenses and things like that. So when we looked at the property, it was only worth somewhere between $120,000-$125,000, give or take.
After all the expenses, they would have actually had to pay a couple of thousand dollars out of pocket. So we structured it to say, I’ll take over the $116,000 mortgage and I’ll pay for all of the closing costs, which came out to roughly about $2,000. And then I’ll give you an additional $2,000-$3,000 for moving expenses. So all in, I’m right at about $5,000 above the loan assumption, if you will.
Now, once that came into play, I had to get the Airbnb ready. This property wasn’t in the type of condition it is now. I spent another $7,000 across the renovation and the furnishing of the place with the furniture, the dishes, and the things of that nature before I was able to rent it out, which took roughly about two months.
This place could have gone for $850 a month if it was long-term—but I’ve actually doubled that. I’m at that $1,500-$1,700 range every month just by making this Airbnb. So, we just covered income. Now let’s go to the expenses.
For this property, we’re talking the full PITI payment—principal, interest, taxes, and insurance—as a little over $800. Now after that, we have the utilities over here for the Airbnb, which is roughly about $150. Then the furniture, although I put a down payment, I financed a large majority of the furniture to help reduce my upfront costs. But I still have about another $100 a month that I pay toward that.
All of that being said, I’m roughly right around $1,000 in expenses. But as I just mentioned, this property’s bringing me in close to $1,500 on average. So not only am I living for free, I’m also putting a little bit of money into my pocket every month.
So along this journey, I’ve had many bumps and bruises. I learned a lot of lessons, and if I can sum it up into three things that hopefully help you, I would simply say this.
Nothing in real estate is fast. Everything takes time. And you must realize that you will get to your end if you truly desire to.
The second one, I learned from Alex, or he at least articulated it in a way that clicked for me a few years back. He said, “You can’t count stress on paper.”
To me, it’s “protect your peace.” But ultimately, if you don’t know what it is you need real estate to do for you, you’re going to be chasing this dream.
And I’m going to give you a quick example. If you know you need $2,000 a month in passive income to meet all of your financial needs, then why would you sit there and focus on getting 20 doors, 30 doors?
Why not just get three or four that give you that amount and be done? Regardless of that, just understand that if you stress throughout this process, it will make the journey much more difficult.
Obviously, you need to continue to dig into these forums, dig into the BiggerPockets Podcasts, continue to gain that knowledge, and continue to grow that network. But you will never make it to the finish if you don’t take your first step.
So with all that being said, that’s three quick and easy tips that I really hope can provide a lot of value for you and your family in the future. My name is Mike Glaspie and I use real estate to create my financial freedom. Now go out and create yours.
Have you snagged a great house-hacking deal? How did you land it?
Share your story in the comments.