BiggerPockets Podcast 223: How to Become “Set for Life” Through House Hacking, Frugality, and Maximizing Your Income with Scott Trench

by | BiggerPockets.com

A lot of people want to achieve financial freedom—but many who start the journey never arrive. So what’s the best way to truly set yourself up for success in achieving financial independence and wealth? That’s the topic of today’s show, where we sit down with Scott Trench, author of Set for Life, to discuss some of the simple yet powerful, tactics people can use to increase their income, reduce their expenses, and lead a legendary life.  

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In This Episode We Cover:

  • A little bit on Scott‘s background
  • The path to early financial freedom
  • How to house hack your way to a portfolio of properties
  • Tips for using the BRRRR method
  • How to invest despite what the market situation is
  • An introduction to the book Set for Life
  • The three stages of wealth mentioned in the book
  • What you should know about the “financial runway
  • The bonuses that comes with the book
  • A discussion on making more money
  • The importance of finding a job you love
  • How to get the set of skills you need to succeed
  • Scott’s advice to those who are getting their first deal
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “It’s not just about being thrifty or cheap; it’s about being smart.” (Tweet This!)
  • “Because we were responsible financially, we were able to take risks.” (Tweet This!)
  • “Understand that what I’m doing today is what I need to get to the next level.” (Tweet This!)

Connect with Scott

Show Preview

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 1500,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

57 Comments

  1. Jered Sturm

    Great Interview Scott! Thank you for taking the time to share your wisdom to help improve so many people’s lives.

    On podcast 205 Dave Meyers said I was possibly the most mature person in his 20s he had ever met BESIDES Scott Trench. I am happy to take second behind you on this because he is right, you have your stuff together and practice what you preach.

    I sincerely hope your book will get the traction Rich dad poor dad did because the objective is the same but your book is more actionable and updated for today’s financial landscape.

    Keep up the good work!

  2. charlotte edwards

    Enjoyed the show today! Scott, it wasn’t until the end when you shared your age that I realized how young you are. I hope to achieve, now in my 30s, what you’ve done already. Keep it up! You’re an inspiration to many.

    And I’ll need to listen again for the email address to get the bonus… but it’s already preordered on Amazon…excited to read it.

  3. john clark

    What a great podcast. 26 years old and has the world by the ba!!s. The way you approach situations is what I wish I had done when I was younger.

    I just pre-ordered the book and plan to have my young adult children (20 and 18) read it.

  4. Jose Matuk

    Thanks for yet another great podcast guys. Scott, I really like your FHA (BRRRR like) strategy but I have a question. I’m also in a really hot market right now (DFW) and I haven’t been able to compete vs. cash or conventional offers using my FHA. How do you go about it?

    • Scott Trench

      Thanks Jose! You are correct that you are a less appealing buyer with the FHA loan vs cash or even conventional. The key is to offer anyways and keep persisting until you get a property that makes a ton of sense. The advantage of being able to use such extreme leverage as 5% down is partially offset by the disadvantage that you are a little bit less attractive to the seller, all else equal.

  5. Aaron L.

    Scott— great interview, I plan on picking up your new book this weekend.

    Can you clarify something about house-hacking though? In the podcast you said someone could live in a hacked house for 1 year, then repeat the process…if someone purchases a house with an FHA loan the only way they can buy a second home is by putting 15-25% down… How do you buy a house with 3.5-5% down and then repeat that process in 1 year with another 5% down loan? The only way I’m seeing is if you buy the first home at 70-80% of value and then refinance out of the FHA loan? I’m sure it can be done, but in a hot market trying to purchase a house at 70-80% of value with an FHA loan (especially if it’s 203k), can be tough!

    Thanks!

    • Scott Trench

      Aaron – great question.

      The key is that a combination of things work together to help you serial house hack:

      1) Yes, if you buy at a discount, you will have some baked in equity that will help you refinance.
      2) If you make any improvements to the property with your nights and weekends, you will be able to hopefully add some equity
      3) You are paying the loan down through amortization
      4) If the market improves, you may benefit from appreciation
      5) Because you are using tenants to cover your mortgage, you live rent/mortgage free, assuming things go well. This will help you save cash quickly, which can be used to buy down your mortgage, and help you to refinance.

      The key is to expose yourself to opportunity, work hard, and do what you can to minimize risk if you can’t get that much equity in a year.

  6. Jonathan Johnson

    What was the 200-something loan product, I think Brandon mentioned on the podcast? I thought it would have been in the show notes. Sounded interesting.

    Great job on the podcast Scott, really like your thoughts and I read a lot of your stuff on BP.

  7. Spencer Glaser

    I have listened to about 100 BP podcasts and that was definitely in my top 3 favorites. I related to so much in this show and I am looking forward to reading “Set for Life.” I am a 27 year old attorney in the process of buying my first house hack and I am dealing with $80k in student loans, so there was so much in this show that hit home for me. Thank you @Scott Trench.

  8. David Krulac

    Scott,
    Very enjoyable Podcast, lots of great insights, wish I had your insights at your age! I strongly agree that less is more, as I wrote in the Bigger Pockets Book, “Real Estate Rewind”, I didn’t need to buy and sell more than 900 properties like I did. You don’t even need to buy 100 properties. You can generate $100,000 positive cash flow with 10 properties producing $833/month positive. I house hacked my first property, as I talked about in Bigger Pockets Podcast #82. I also financed the first 11 properties 100% in one way or another. Those first 11 properties generated over $2.8 million in capital gains and rents, maybe I should have stopped there?

    One of my philosophies is to “Thin the Herd”. Every year I evaluate the performance of my properties and thin out the weaker properties, sort of a Charles Darwin approach, and over the last 2 years have sold 40 of my properties.
    David Krulac

  9. Akintunde Akinola

    Scott,

    Excellent show!

    I must say you possess great poise and wisdom not normally found with someone your age. I myself being just a few years older than you appreciate the information presented in this podcast. I have listened twice already to the podcast and will need to listen a third time about the instructions for bonus material and private webinar for those who purchase ‘Set For Life’ within the first week.

    Did I hear that correctly there is special bonus material email address and private webinar for book purchasers?

    Akin

  10. Nathan G.

    First off, Scott is a very mature, capable man for his age. Incredible that he could write a book and have this much financial savvy at such an early age.

    I don’t think he said anything in the podcast that I disagree with. He’s a gifted writer, particularly for someone so young. My favorite part? He’s financially savvy. I don’t mean he’s a savant; I mean he is smart enough to know that a wise investor doesn’t bet their future on credit card debt and that it’s OK to pack your own lunch and save for a down payment. That puts him in the top 4%!

    Another wise choice Scott makes is to avoid over-leveraging. BP members love to maximize leverage and buy as many houses as possible that cash-flow $100 or less. When the market shifts – and it will – many of the newer investors (post-crash) will lose everything and guys like Scott will snatch up their properties at a discount.

    My only advice: stay smart and avoid the advice of newer investors. Stick to your plan and you’ll win whether the market is hot, stagnant, or cold.

  11. Donnie Martens

    Scott & BP Team,
    Amazing interview! We’ve ordered the Set for Life book and are super excited to use its principles and philosophy to guide us down the runways! Thank you Scott for putting your ideas and thoughts on paper for others to benefit from. Truly appreciate it!
    -Donnie & Colleen Martens

  12. David Coles

    Just finished reading Set For Life on my Kindle after listening to this Podcast. Rated 5 stars. Scott, your attention to detail is amazing. Thank you for laying out the steps so clearly. Looking forward to the journey ahead. Cheers!

  13. Chris Pinches

    I thought I was frugal and savvy with money. Scott just flipped my world upside down in less than an hour. That’s just with the Podcast. I can’t wait to read the book! Determination, dedication, and discipline with finances is a hard task to accomplish in your lifetime never mind in your 20’s. It’s motivating and admirable. I may be older but I want to be like Scott when I grow up! Thanks for laying out the blue print. I can’t wait to see what doors it opens for my family!

  14. David Morris

    Great podcast. I just ordered two copies to give to my young adult daughters and their husbands. They are around the same age as the author and I thought the info would be good for them to read. I hope I’m not too late for the bonus material. I really would like to listen to the audio book!

  15. Shaidah Karim on

    Scott and Biggerpockets: Another great podcast. Thanks for all the information. I have always practiced frugality so I can relate to a lot of what you say. My spouse and I bought our house similar to “Joey”, at $420k in ’05. I really wish we knew about house hacking back then; we would have bought a duplex. Fortunately, with appreciation, our house has more than tripled in value (in 12 years) and we are using our HELOC to buy rental properties in markets that are on the rise. I really look forward to reading your book!

  16. Sarah Karakaian

    Thank you SO much for this episode! It couldn’t have come at a better time for my husband and myself. For the past 4.5 years we’ve been house hacking a Queens fixer and just sold it – we close in 2 weeks. We bought it for 475K with 3% down and sold it for 875K. We’re leaving NYC for a bit of a slower and easier lifestyle and plan on putting into practice all that we learned from our first house-hack. You’ve refocused our mindset on frugality and keeping our eye on the prize. We don’t know exactly where we’re moving to yet – somewhere in the PNW – so we have a lot of work ahead of us: getting to know people, understanding a new market, etc. but this episode turned up the heat in regards to our motivation!

    Scott, in the episode you’re asked how you deal with being in such a hot market. If 17-27 offers are made on a duplex, how do you score one and still manage to buy smart? We have a significant sum of cash to buy property with, great credit, and enough systems in place to restart our construction and design business wherever we go. We want to buy the fixer du/tri/quadplexs – but any tips on how to do so, without being a big corp., and still spend our money wisely? Happy to message you privately if you’d rather and if you have time to discuss! Regardless, thank you SO much for sharing. Already purchased your new book. -Sarah

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