I’m Using the Best of Robert Kiyosaki’s & Grant Cardone’s Teachings to House Hack in a New Way

by | BiggerPockets.com

It’s been a little while since I last wrote an article for this blog. That’s because Patrisha and I relocated the family from Lima, OH to Chandler, AZ, which has been a trip—especially considering we still have our portfolio in Ohio.

Upon arrival, we rented an apartment for eight months, and I got busy figuring out what to do about our permanent living arrangements, while Patrisha became an agent with Keller almost immediately. The second month in Chandler, we had what I can only describe as one of the most challenging months for our Ohio portfolio. We experienced issues with physical vacancy, economic losses, and CapEx. It was nuts! Ohio was saying goodbye to us.

And still, the issue of a permanent living situation loomed. Should I buy some investments first and bridge into a primary later? Should I not worry, rent, and be free? Should I do a traditional house hack? Should I do a live-in flip? 

Well, before we go on, I must illuminate some realities to the likely readers. You see, if I were to take a guess, I’d say that much of the BiggerPockets audience today is very likely young and inexperienced. That being said, let me explain something to you.

When you grow up, you will hopefully meet a nice partner. They will support you and your dreams because they love you. More than likely, they will eat a lot of proverbial crap standing by you and facilitating your success. And when you do finally make something happen, it’ll be time to pay up.

If you are smart, you will have learned by then that you only get one mistake from them, and they already made it—they married you. They won’t make another mistake, and they sure as hell won’t make the mistake of sleeping on a futon so you can hack your way at life and save a penny. Won’t fly, friends!

But I know the two of you. Having someone pay for your life is in your DNA, as it is in mine, and that’s cool. I can’t blame you there. We can’t all be like Brandon Turner, buy the biggest house in Podunk, and fork the mortgage over out of our pocket.

But back to the story. Having landed in the middle of one of the hottest markets in the United States, I knew I had to do something creative, and my wife was not up for any of Scott Trench’s schemes. She needed a house, and it had better be a nice house. She got one!

Related: Meet Tim: How One Newbie Investor House Hacked a Duplex With No Prior Experience

What I figured out in the end surprised even me with its elegance (and I don’t often get surprised at my own brilliance, as I am quite used to it). 


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4 Theories on Home Buying vs. Renting

  • Robert Kiyosaki says: Your house is a liability.
  • Brandon Turner says: You are wrong! People need a place to live, and the only alternative is to throw money away on rent. Buy, people, buy! 
  • Grant Cardone says: Brandon, you are wrong. Today’s economy demands that we remain as unburdened as possible, and a house just ties us down. People have to go where the opportunity is. Freedom, guys!
  • Ben Leybovich says: You are all right. And because of this, any thinking individual would want to take the best from all of you and synthesize it. And since I am a thinking individual (not when when my kids are on break, though), this is exactly what I’ve done! I’ve discovered how to bridge your differences and synergize your perspectives into a strategy that plugs all of the holes and amplifies the benefits of all of your approaches.

This article is the first installment in a series in which I will explore my version of “luxury house hacking.” It’s all about life design, but without the futon silliness that works for youngsters and no one else. I want my pool in the backyard. I want my tile, granite, and travertine everywhere. I want a nice garage for my Tesla. But I want someone else to pay for it—just like Scott!

Stay tuned. I’ll tell you how.

Is Robert Kiyosaki Right?

So, is Kiyosaki correct in telling you that your house is a liability?

Yes, he is correct, at least in the most pure sense. Kiyosaki is correct if we approach the definition from the standpoint of cash flow. The house does indeed cost money every month, quarter, and year, and so long as these losses are not offset with income, the house you live in is a liability.

However, if we flip this argument over, then we’d be correct in saying that as long as your house puts money in your pocket, it turns into an asset—right? I mean, if a liability is something that takes money from us, then something that gives us money is not a liability.

What follows is this: If my house makes me money, then I’ve addressed Robert Kiyosaki’s concern. My house is no longer a liability. The easiest way to accomplish this is to move out and convert your house into a rental, but if you do this, you’d have to sleep on Scott’s (or Craig’s) futon. 

You could rent out a room in your house. When you are young and consume more beer than water, this may be a good option. Once you switch to wine—craziness!

Finally, you could buy a duplex and to live in one side and collect rent on the other. The problem is that 99.9% of the time, the location and quality of construction is not so good. For anyone looking to 10x their life, this is not an option.

Is Grant Cardone Right?

Cardone’s take is slightly different. Grant is a hustler and believes very strongly that “the hustle” is how a young person in today’s economy gets ahead. With that being said, Cardone believes that being able to move around freely is a huge asset. Therefore, in his view, buying a house is the wrong thing to do.

Grant is both right and wrong. More on this later.

What About Brandon Turner?

Brandon is also both right and wrong.

Brandon’s main point is that paying rent is akin to throwing money away. Why? Because this money buys neither cash flow nor equity, and as far as Brandon is concerned, this is wrong. He’s not wrong, but neither is he right. 🙂


What About Ben Leybovich?

I disagree with Brandon.

When considering renting versus ownership, the thing that jumps out is that ownership is a permanent destination, while an renting is a transient kind of a thing. Getting out of a house is a much more involved and costly proposition than getting out of an apartment. So is maintaining a house.

Unlike Brandon, I don’t see renting as a negative thing. Instead, to me, renting is akin to purchasing flexibility. It’s expensive, yes. It doesn’t build equity, no. But it buys a lot of freedom.

Thus, when you have more than enough cash flow and you don’t care about building equity because you’ve already made it, then you’ve earned the right to rent and be totally unattached, which is a privilege in my view. Six months here on the beach, and six months there in the mountains—whatever makes your heart sing. I hope to be there, but I am not there now.

Related: House Hacking 101: How to “Hack” Your Housing and Get Paid to Live for Free

I agree with Kiyosaki.

A house you move into is a liability, unless you can gear it to make money.

I disagree with Cardone.

As I mentioned, I am all for freedom and flexibility—but (and this is a big but) you’ve got to earn it. You’ve got to earn the right to be this unattached. You certainly cannot be living on W2 income, with no passive cash flow or substantive equity, and be renting. 

So, What Does This Mean?

At the end of the day, unless you’re independently wealthy, you’ve got to buy a home. In many of your cases, it might be your biggest and best investment. But you can’t be the only one on the hook paying for it (unless your name is Brandon). In other words, you cannot buy a liability. You’ve got to buy something that makes you money.

That’s what I did. My house has brought in about $9,200 thus far. I anticipate being able to close out the first year at $15,000-$16,000. All of the money goes toward the mortgage and covers a really good chunk of it. I’ve achieved all of this without compromising on location, age of the home, amenities, finishing textures, or any aspect of my family’s quality of life.

This is a house hack formula unlike anything you’ve read about before, and in the following articles, we’ll discuss more of the details. I believe this is the best opportunity for most of you in the current cycle.

Stay tuned!

What’s your view on the renting vs. owning discussion? Are you on board with the house hacking strategy—or is it not conducive to your lifestyle?

Leave your thoughts below.

About Author

Ben Leybovich

Ben Leybovich has been investing in multifamily real estate since 2006. His area of expertise is creative finance. Ben works extensively with private as well as institutional financing. Ben the author of the Cash Flow Freedom University and creator of a cash flow analysis software CFFU Cash Flow Analyzer.


  1. Scott Trench

    Nice article Ben! Except… I don’t sleep on a futon. I sleep in a pretty reasonable place, with a very large bed, a garage, a backyard capable of hosting dozens of people for beer drinking, games, etc. I have a great view of downtown.

    You are right about Craig though ha!

    I’d say I’m somewhere between you and Craig.

    And, from this point onwards, I plan to slowly increase the luxury of my house hacks with each passing year, while still making money.

    So, yes, it is a spectrum. To get started, if people really want a life changing financial impact, get started the way Craig is, or the way I did, and recognize that that is just the beginnning. As you build wealth and cash flow, the point is to increase your standard of living. So, use that cash flow to fund a nicer house-hack for sure.

    • Ben Leybovich

      Hahah way to throw Craig under the bus hahaha

      Here’s the thing. I am not so sure that my luxury burns any more than your middle of the way. Yours is conventional thinking – you need to grow into things. My point is that conventional thinking doesn’t apply here. Going for luxury actually cost less if you do it right, Scott.

      I prove it with numbers in the book, by the way 🙂

      PS: Why didn’t BP publish my book, Scott? It would have fit great in the portfolio.

      • Craig Curelop

        Hey now! My futon is great! It’s reasonably sized (full). Not to mention, my commute is a less than 10 minute bike ride and maybe 15 minutes to downtown. That’s luxury to me :).

        In all seriousness, my view is that everyone at any stage in their life has their own “competitive advantage.” Mine is that I am relatively young, single, and super flexible with my living situation. Not taking full advantage of that, in my opinion, is foolish.

        I am on board with Scott’s idea. As I can afford nicer house hacks, I will. It’s just a matter of making sure the numbers work.

        Ben – Put your book on my list. I will be sure to give it a read!

  2. Nathan Richmond

    So Ben, you have definitely piqued my interest. How long are you going to make us wait for the next installment? And what about this book you wrote?

    I’m house-hacking a duplex in which I just finished remodeling and am following the BRRRR model. But I’m curious about your upscale house-hacking. Don’t keep us waiting!! 😉

    • Ben Leybovich

      Haha Nathan – I’ll write the next one soon. And the book is available on Amazon – just search for ‘House Hacking’.

      Upscale all the way, man. What the hell is the point of compressing your life-style if having more for less is an option. It’s all about the synergy of burn vs. income, and while upscale costs more it earns way more. Why? Because it’s upscale and luxury, and people who have option pay for that!

      Luxury House Hacking – the only way to do it!

  3. Joe J.

    Looking forward to reading about what in the world this strategy is.

    So far, our “middle way” through the flexibility/asset/liability personal residence jungle has been buying SFRs for our own use that make economic sense as (eventual) rentals when we move, so that we can simply do that on relatively short notice without losing out to transaction costs or the vicissitudes of market valuations.

    The return rate is not as high as living in half of a duplex, though, and obviously we don’t get *current* income out of it (although, since we’ve bought rental-appropriate places which would cashflow if used that way, we do save vs. the cost of paying rent. But that’s not quite the same as real cashflow.)

    • Ben Leybovich

      Hey, Joe!

      What you are doing certainly can work. The distinction, however, is that any property that can on a whim become a rental is not likely the quality of asset to make my heart sing. Different approach – you are OK with compromising for a while for the sake of making a smart financial move, while I wasn’t willing to compromise and still wanted to make a smart move.

      So, my method is about exactly that – smart but without compromise…

      • Jason Brown

        So I loved this blog, my question is how do I find out how your approach to house hacking is different? Is this the part where I read your book (which I’m fine with by the way)? I am intrigued because my situation is similar in that I have a wife and wow little girls and can’t really sacrifice comfort for the sake of investing.

        • Ben Leybovich

          Jason – this is so true. Surfing the BP forums and blog it might appear that most people looking for a solution are like Scott and Craig. But, this is the farthest thing from the truth. Most are like you and me, and we need a solution.

          To answer your question – I’ve already submitted the second installment into Allison. Not sure when she’ll release it on the blog, but I would think sometime next week you’ll see it.

          Part and parcel with this discussion are the perspective and the mechanics. I will release a number of articles in this series to cover both. And, as you can imagine, if you want it all now and in one place, the book would be your answer.

  4. I looked at your book on Amazon. Your house hack seems to require a vacation rental. You should be aware that one community after another is banning vacation rentals.

    • Ben Leybovich

      Katie – you are correct. There is indeed some regulatory pressure right now. The hotel lobby is indeed strong. That said, I am very, very bullish on this model. Taxes will go up, and more regulations are sure to come. But vacation rentals are here to stay…or else I am moving back to Russia or Venezuela, either of which at that point would be more capitalist than the US…LOL

      I discuss the regulatory concerns this in detail in the book 🙂

      Thanks so much!

      • Also if you are renting and not buying, that would imply that you are subletting at least part of it to actual temporary vacationers, and even all of it when you are not there. It seems you have basically taken over management from the owners. Do I have that right?

        • Ben Leybovich


          I think that in the above article I addressed why nobody should be renting unless they’ve earned it, both in terms of cash flow and balance sheet. So, any conversation of renting is moot point in this context.

          This would really be a lot easier if you just read the book. You may not agree with everything, and you may chose that my methods are not appropriate for you, but you’ll at least understand the finer points of what I am proposing 🙂

  5. Kevin Sapp

    Hi Ben,
    Me again!

    Glad you are settled in your new digs. Hope you have a at least a 50A feeding the Tesla in the garage! AZ would be a great place for solar too to take advantage of more tax credits.

    It will be interesting read your witted opine of house hacking in future posts.

    As a post from me to you would be suspect as a hacked account if I did not offer up controversy, here we go 😉

    I’m old, so, to your own admission, probably not the targeted BP demographic, the house hacking trend is what we called a roommate, a duplex and living one one side was an investor and sleeping on a sofa, well, that was what friends did to help someone out. Once we are financially successful, renting rooms, duplexing and couchsurfing have new, different, less romantic meaning. I’ve been on the receiving and giving side of most of these. Now mainly the giving.

    There are lots of ways to use your house, some more creative than others. AirBNB and the like seem to be the latest trend, with the drama and suspense, please don’t disappoint with something so mundane. I, the old guy, don’t really want people I don’t know coming into my house using my stuff for a few bucks. I certainly don’t want them messing with the home theater controls. I hope your success and new hacking scheme has earned the option of freedom to keep your privacy and your schedule your own. That is, in addition to a paid off Tesla.

    Good luck with the book and the “new play” on house hacking.

    “O brave new world with such creatures in it, ’tis new to thee”

  6. Lana Lee

    Thank you, Ben for this article. Your style of writing is very entertaining. You are really good at putting your thoughts on the paper. I could never tell that English is not your first language. As to the question that you raised at the end of your article the house hacking is a great way to increase your passive income for some people, especially bachelor’s and couples without children. For us, as we have 3 kids, it’s not conducive. I can’t imagine jumping from one duplex to another or sharing home with others. Although I totally agree that primary residence is our liability. That’s is why we are planning to take out a HELOC to use as a down payment for purchase of a duplex.
    I hope you’re feeling well. I can relate to your story that I heard on BP podcast as I myself had couple episodes of MS. I admire your strength and intelligence. Your ability to turn your career around is incredible.
    Thank you

    • Ben Leybovich

      Svetlana – thanks so much for the kind words!

      Jumping from one duplex to another is not exactly what I am proposing:) My version of house hacking is to scale way up, and I mean way up. Really good locations and really good construction. Not at all the scrounging and penny-pinching that is so commonly advocated by others on BP.

      We live once – so live! And have someone pay for it 🙂

  7. Pedro Gonzalez

    Again with the House Hacking method as if it is something new? Who even came up with this “house hacking” term? I’ve been living in my duplex rent/expense free since 2010 and little I knew, it was called house hacking , reallyyyyy ??? :0)) it makes me laugh. And what is it now, luxury house hacking?! This is the new thing that, let me see, people been doing sinceeeeee, uhhh, foreverrrr. Come on, stop the house hacking insanity people, it’s not rocket science, nor it is a neo real estate investing technique either. Just in my area, million dollars houses, including multi-families ones, people buy and rent/lease whatever they can whether it is call in-laws quarters, guest houses, etc etc. I think Noah was the first house hacker in his infamous arc of Noah.

    Which brings me to Vac rentals and the regulations that local governments have been trying to apply, and I say “trying’, because, what can they do really, how are they going to regulate that? Who is going to tell me what and to whom to rent part or whole of my house? I just don’t see that happening, so Vac rentals are here to stay, like Uber, Ebay and NY cheesecakes, they can stop progress and the rights and ability people have to direct free trade, especially in the internet era, it’s just like trying to regulate porn online, it’s just impossible.

    And my last point, about the rent vs own, well, they are all right, even you Ben, in your great house hacking wisdom, is just a matter of preference and where you are in life. As far as I’m concerned, I will never buy a property of any kind that does not pay for itself, I just won’t, it wouldn’t be an investment then, it be just an expense, and I’m all for reducing expenses, especially living expenses. But everybody has different needs, likes in life, some people want their dream house (I don’t dream of houses), white picket fence and all that. I personally, will never buy a house, duplex and up, for me, that’s why this is the perfect business for me and the lifestyle I want.

    Currently, I am getting ready to expand my duplex to a 4plex, and acquire a couple of more multi families units. My vision and finances are finally starting to shape up, I’ll keep you post it my BPers. As I become more successful in the business, I’ll post more, and get more involve in the site as I’ll have more to offer to the BP community here, who knows, I may even write a book about, whatever, since that seems to be the thing in REI, have my own podcast or something ;)) Until then, good night my BPers. I was about to go to sleep when this article got me all hot. I think that if I hear or read another article about “house hacking” my head is going to explodeeeee :)))))

  8. Shawn Breyer

    What’s your take on AirBnB’s sustainability in a downturn? How did you plan with that in mind? I’m wondering how well this will perform vs a duplex in a downturn since AirBnB seems to be more vacation and travel oriented, and people in theory would be doing less of that in a downturn.
    Just wanted to know your line of thoughts on that aspect of it.

    • Ben Leybovich

      Shawn – your thinking is exactly backwards. Think of it –

      On one hand you are attracting people with disposable income, meaning wealthy retirees, vacationers, business travelers. on the other hand you are attracting a person who lives pay check to pay check and spends 50% of said pay check on rent. In case of a downturn, which is safer?

      Now – this won’t work with house hacking as it is commonly propagated on BiggerPockets. Mine is a different take. Very upscale, which carried many, many benefits, not the least of which is that my audience are upper crust who are not susseptable to economic fluctuations in the way lots of other people are.

      And naturally, the side-effect is that I get to live it up…almost for free 🙂

      Lots more to this conversation, but makes sense?

      • As I mentioned before, the problem is not so much downturn, as cities banning vacation rentals. This has already happened in my community,and a whole bunch of these houses went on the market. It is taking months for them to sell. One reason is they think think they can command a higher price than other houses, but from the buyer’s point of view, it is just another house. Sellers are in denial.

        • Ben Leybovich

          Katie – there is a regulatory glut at the moment. Same could be observe with Uber. At the end of the day, and this is almost verbatim from the book – research communities and don’t buy where communities or municipalities are aggressive. Not all communities are equally aggressive.

          You bring up another interesting point, and I concur. When buying a house which is conducive to house hacking, never forget that it’s just an SFR. Don’t try to capitalize value as you would in multifamily as this is not how the marketplace views these houses. Another point covered extensively in the book, by the way 🙂

  9. Bill Regan

    Hi Ben! Great article and I am on to something very similar currently. Since moving to a new area we have been renting an apartment and like the idea of house hacking, but with wife and toddler in tow we can’t quite live in the places we might have a few years ago!

    I actually had a duplex right out of college way back in 2004 before “house hacking” was cool 🙂

    Anyway, we are going under contract on a large single family home with a mother-in law unit in sunny Clearwater Florida. Perfect for some AirBnB action. If our calculations are correct (and we’ve been very conservative), the rentals should cover all the PITI and we can divert that payment to getting rid of student loans and then into an expanding rental portfolio.

    Looking forward to part II!

    • Ben Leybovich


      Dude – my Casita is literally 134 square feet. VRBO just sent me notice yesterday that according to their metrics I am outperforming 97% of my market. Their estimate for my annual GPI is half of what I’ve already got on the book in half the time.

      134 square feet done right!

      All these newbies trying to buy a fourplex in this market which will earn a fraction. Silly

      Good for you, Bill!

      • We use VRBO exclusively but only for the listing. We do not let them collect funds or do any other work for us. We will have nothing to do with AirBnB. We are vigilant about taking measures to have our listing scrubbed from other sites which steal the listing and photos in an attempt to divert funds. So far we have never had two set of guests show up at the same time. The only guests who come are the ones we expect.

        • VRBO charges a flat $399 per year. They make most of their money when people book online if the owner allows that. They charge the owner 3% (basically the credit card merchant fee) and the guest varying percentages, up to 9.5%. Personally, I would rather vet my guests.

  10. Casey Christensen

    I am excited to read the next installments that you write. My wife and I purchased a home about 2-years ago and have been living in the basement while renting out the upstairs portion of our home. We have really loved how this has been able to pay a good chunk of our 15-year mortgage every month. We have a nice living space with a big back yard that my kids love to play in. The only sacrifice we have made is we are without a garage (which only sucks in the winter time).

    • Ben Leybovich

      Casey – good for you. Having said this, there was absolutely 0% chance that my wife would consent to living in a basement unit… Your wife doing this is part and parcel with that bit about her loving you and wanting to support upward movement alongside you. There will be a time when she’ll want something more…Luxury House Hacking will do the trick 🙂

      Stay tuned!

  11. Erik Whiting

    I’m interested and I hope it’s a great strategy. One concern…this article closes with the comment, “This is a house hack formula unlike anything you’ve read about before,”

    Then one of the commentators (Katie, Aug 2) said she checked out the Amazon book at the strategy relies heavily on vacation–which you acknowledge as true. Right now I know of 5 gurus/seminar speakers pushing vacation rentals heavily. Al Williamson comes to mind. I met him 2 years ago in St. Louis. Quite an impressive person. I think his method is very plausible…but again not unique.

    So…. I will be interested to see how this is unlike anything I’ve ever read before. I don’t think it’s impossible to put a new spin on an old strategy, but I’m from Missouri and an incorrigible German by ancestry, so you’ll have both “Show Me” and convince me that your approach is truly as unique as claimed. Looking forward to it!

    • Ben Leybovich

      Erik – actually, I am not sure that I love VR as a business model. Especially since we must realize that the reason VR is so popular with investors because property values are up, and VR simply cash flows better.

      The issue for me is risk. Considering the duly noted regulatory concerns, people that bought specifically with VR underwriting in mind could find themselves in big trouble.

      I am not OK with that. The reason I specifically like my approach is because I feel that it maximizes the ROI yet lowers risk in a number of ways.

      Nothing is totally void of risk. The essence of investing is figuring out how to synergize risk/reward/time commitment. I think I have a winner that’ll work for a lot of people.

      VR does work extremely well in some commercial applications, but not all by any means.

  12. Ben,

    Liked the article (looking forward to reading more of the series) – almost dropped the $14 on the book when I realized I’m probably doing better than 90% of your hack (with some degree of customization to suit).

    For the past 5 years I’ve been living in a 4 bedroom, 2,300 sq. ft. home in Scottsdale as a rental (I realize you advocate buying, but I couldn’t figure out the financing fast enough 5 years ago). The house comps in the area are about $450K to 500K. So, decent enough area, slightly older home (which is how I managed to get a break on the rent and get sublet rights).

    My rent is $1,695 /mo and I rent out 3 fully furnished bedrooms for $750 a month EACH, grossing a total of $2,250 in revenues monthly. If that weren’t enough, I happen to have an oversized RV space and decent sized drive, so I rent out the space as uncovered (but secure) RV storage. I have 3 parked here right now each paying $70 a piece: +$210.

    My “hack” allows me to cover 100% of the utilities, cable, maintenance, and upkeep while pocketing a $150 in the summer and as much as $450 in the winters.

    I use AirBnB to fill rooms (when I don’t have a lease) and craigslist to find my longer-term “roommates”.

    My lease will be up in February, so I’m now getting geared up to tackle my next hack – similar area, but bigger home, pushing for nearly 4000 sq. ft, with a home value of about $650 to $750k. I am confident that I could get room rental rates with a 6-month lease in the neighborhood of $900+ (presuming the house is spacious and well appointed with amenities).

    I started hacking about 8 years ago when I “illegally” sublet a bedroom out in my apartment to a traveling salesman – it was ideal, he needed a place 5 to 10 nights a month, and was willing to pay hotel rates to keep the room dedicated as his. That hack allowed me to stay in the apartment nearly rent free.

    The part I need the most help with is the financing (the last time I had a w2 was over 20 years ago). I’ve suffered some setbacks and losses (from another business) over the past few years that have wiped out any down payment I had hoped to have.

    Does your book address some of the more creative, no-money down (with no established credit) financing options? I really need a rock solid strategy that can help me break this “rental” cycle and start building equity.

    I’d love to share & exchange notes with you.

    • Ben Leybovich

      Alan – there is absolutely zero chance I’d want roommates living in my house with my 2 kids and Patrisha. Like – zero!

      I know it works, and I discussed it in the book. But, there is a better way. You can do this with 3.5% down and an FHA note, by the way. Buy the book – you’ll love it. And then, look me up and I’ll find you a deal!

  13. Jerome Kaidor

    Hi Ben! Well, I’m not hacking – although I have hacked on my house….

    The year was 2011. RE was in the dumps. We were searching for a place to live….and then we found it. The HPMM ( Half Price Mini Mansion ). 3400 sf, 5 bedrooms, 4.5 baths, built in 2008, a one-acre lot, fruit trees, dug well.

    The HPMM was a foreclosure. It had been vandalized. The air conditioners were gone. So were all the appliances. And some of the blinds. And the shower heads. And the downstairs furnace. And the granite surround of the gas-fired fireplace had been busted up. The smoke detectors were all beeping about their batteries. The water had been turned off, and every toilet had a present from house hunters.

    But – the structure was sound. There was no evidence of any sort of leakage or dry rot. I knew I could just go down to the appliance store & write a big check.

    We talked the bank down about $80K, bought the house for cash, and then sold our old house. The HPMM cost half what we had gotten for the old house, and it was twice as big.

    I sold an old car ( good-bye, beloved ’58 MGA! ) and bought appliances. I got the water turned on and flushed all the toilets ( good-bye, presents! ). I put batteries in all 10 smoke alarms, and gradually the beeping went away.

    The air conditioning took a little longer. I hit the books and got an EPA air conditioning technician license. This allowed me to buy R22 refrigerant on Ebay. I bought new air conditioners and a furnace, got a permit, installed the equipment. Now I have a surge of pride ( and comfort! ) whenever I turn the thermostats down.

  14. Will F.

    I’m about to house hack in the area I live. I’m hopefully moving into a triplex or duplex (in my area they are two-3 houses on a shared lot) for $1M-1.2M.

    A SFR in my area costs $800-$1M, so I figure a triplex or duplex will get me 2-3 house units for $400-500k each.

    The ROI isn’t as great as buying units somewhere inland, but I wish to take advantage of low owner occ rates, and be in a house w/ no shared walls in a great area, while still getting some income.

    Hopefully I’ll take advantage of pretty low rates locked in long term, then BRRR rinse and repeat in a couple years.

    Nice post Ben

    • Ben Leybovich

      OK. So let me get this straight. Rich.

      You come here to get all kinds of content. You come here to learn – good for you.

      But, you don’t bother becoming a paid Pro member. Why? Is it because you figure that the time and effort it took, as it relates to both the BP team and contributors such as myself, to put all of this together should not be worth anything? I mean – where’s your gratitude?!

      First – become a Pro member tonight! Why? Because on BP we support each other. It’s a community. And while very few put anything in, most can support by becoming paid members.

      Next – buy my book. Why? Because I am quite sure that you can find something to learn from it, and because on BP we support each other. It’s a community.

      Or, if you chose not to, please feel free to make your way onto other threads where you can, if you should so desire, leave condescending comments. Not here, Rich.

      Thank you!

      • Tyler Parish

        Great reply Ben, I agree.
        I spend money on my education, a pro membership, even the weekend courses most people laugh at. Because if I learn just ONE thing from it, I will profit! Hence why I read these articles, and why I am closing on my fifth house with 3million in real estate now. I still think I’m a newbie!

        FYI a book is $1-$40, taking action on a good deal, a tax break, a tip to keep good tenants, these could save you thousands!!!

        I look forward to your book after listening to your podcast and reading your articles!

      • Rich Schmidt


        Sorry for the snark. I tried to go back and edit my comment after re-reading it, but it looks like BP doesn’t let you do that. Oops.

        Since you asked some questions, I’ll try to answer them.

        My impression (perhaps mistaken) has always been that Pro memberships were for… well, pros. People who are hoping to make real estate their main thing. That’s not me. Real estate investing is a total side hobby for me. It’s not my main thing. At all. That’s why I’m not a Pro member. I get the occasional landlording tip & sometimes share my own experiences on the forums where I think I can be helpful, and that’s it. If Pro memberships are intended for people like me… well, this is the first I’m hearing of it.

        I’m incredibly grateful for the work that’s gone into this site, and I tell anyone who says they’re interested in real estate investing to check it out. Lots and lots of helpful stuff here. It truly is the best website for real estate investors.

        And to be clear, I have no problem with you selling your book. I hope it does really well! This article just wasn’t what I was expecting when I clicked the link in the email. I thought the article was going to describe this “new way” to house hack. Turns out it’s an extended intro piece, designed to get people interested in what’s next. Ok, so I’ll wait for the next article… but then in the comments, I see you repeatedly responding to questions with “buy the book”… hence, my comment. It all started to feel sales-pitchy to me, and that’s always rubbed me the wrong way.

        I’m looking forward to reading about your approach in the upcoming articles in the series, and if it seems like something that might be useful for us, I probably will buy the book to get that next level of detail.

        My comment obviously annoyed you, and for that, I apologize.

  15. martin ciglenecki

    Thanks for the post. I love the idea of taking the best ideas from each however, you missed the mark with your take on Grant Cardone’s position on buying a house.

    While you are right in saying Grant values freedom, his main argument for renting vs buying is that it’s stupid to feed something that doesn’t give you any return. He tries to have people realize all of the money, time and energy that goes into a house and/or property – money, time and energy that could be going into something that gives you a far greater return on your investment.

    The big take away from GC is feed only those things which multiply your money, time and energy. Everything else can fall to the wayside.

    • Ben Leybovich

      Absolutely, and my whole point is that a properly done Luxury House Hack feeds you. And therefore addresses GC’s concerns. This strategy allowed me to quite literally 10X my lifestyle and yet cut costs dramatically.

      GC would be proud!

      Matter of fact, I’m gonna send him my book. Perhaps he will invite me to his show for another round 🙂

  16. Dmitriy Fomichenko

    Nice article Ben, thanks! I did something similar back in 2009, little over a year after buying our house. I was kind of forced to do it. Had a job at that time, my income was cut significantly because of the downturn in the economy so I was looking for a solution. House had a 3-car tandem garage. I converted 1-car garage into living area and large laundry room into bathroom. The result is a studio apartment with it’s own bathroom, laundry, kitchenette and private entrance. My first tenant was paying $650/mo in rent, I increased rent several times since then and currently getting $900/mo. She is about to move out and I’m hoping to re-rent for $1000 (already have several inquiries).

    Just run quick numbers and my tenants paid over $75K to me since I started renting it out. Also right now my corporation is renting an office from me for $1500. My P&I payments are just little over $1,900. The rental income covers my P&I entirely and most of taxes and insurance. So in essence I live mortgage free in a nice house in nice area. My residence is an asset for me, not a liability.

    • Ben Leybovich

      Hahah This is great. My corporation is also renting an office from me. That’s above and beyond the house hack portion…great minds think alike.

      I think it’s safe to say you’re doing a bit better now. Those who don’t know, look up Dmitriy if you need a SOLO, among other things 🙂

      • Dmitriy Fomichenko

        Yes, I would not have to do it now and I’m not sure if I would be able to get my wife’s approval. The part of your article that addresses this issue with “your better half” is spot on. Most of my tenants were females and she is OK with that, but she made comments of being uncomfortable having another man under the same room even though it is completely isolated. Our financial situation changed and we are not relying on that income right now, but the rental in-law apartment was grandfathered in and we continue to enjoy that extra income which is growing.

        • Ben Leybovich

          Dima – this is exactly my point. What we are doing, and what I am proposing to be such a great idea for many, is more focused on luxury with a side effect of house hack. There is no infringement or compression of life – just the opposite.

          This is not a house hack that you do because you want to make ends meet. My version is something you do because you want someone else to pay for your scale-up. This is the opposite of tightening your belt, but it works better 🙂

  17. Jimmy Cao

    Thanks for sharing Ben! Can’t wait to see the next installment and maybe buy your book to learn the whole deal 😉

    I just recently completed my own middle of the road house hack by renting out my SFR, while living in an ADU above the detached garage.

    My renters covers 100% of all my monthly fixed costs and gives a little change back.

    So while i’m not exactly sleeping on a futon, I am extremely interested in ways to improve my life style. So far, I do not enjoy the house ownership experience as much as my peers since I’ve had to sacrifice things like being able to host friends and family, privacy (shared drive way) and the house and ADU themselves are not as up scale as I would’ve gotten if the ADU and sensible cash flow wasn’t such a high requirement for me.

    • Ben Leybovich

      Stay tuned, Jimmy. But, if you are after improving your lifestyle then the emphasis needs to be placed on that. Where do I want to live? How do I want to live? Answer those questions, and then figure out ways to facilitate exactly what you want.

      Or, you can be satisfied with being comfortable…different perspective!

  18. Dustin Graham

    I only made it half way through the comments. But, I wanted to say that one thing I hope you address in your next article is the risk side of things. It sounds like you’re proposing “luxury house hacking” but what would keep me up at night is that a few bad turns seems like it could get much more costly much faster going luxury. With my current properties, if one or two of them had some serious issue, leading to lost tenants, I could stretch things thin, and cover the mortgages, if it takes a few months to get things back together. This is for a 100k property. If it were a 1mil property, and I lost a tenant for 2-3 months, I wouldn’t be able to cover it myself with other income.

    • Ben Leybovich

      Dustin – the reason I am doing what I am doing is precisely because it has a lower risk profile than any of the other options available to me 🙂

      A business enterprise of any sort is a synergy whereby we can make the most profit, with the least time commitment, and with the lowest possible risk profile. Luxury House Hacking is it for me, and I think for a lot of other people who want to live better, more convenient, and more rich lives.

  19. Lauri Hines

    Hi Ben,

    Based on the article, it seems you are referring to vacation rentals.

    We have five rentals on the Central Oregon Coast (4 VR, one long-term) and all of the VR’s gross $60-75K a year.

    The vacation rental market is not for everyone, and commercial rates once you get past your second purchase (i.e., primary and vacation home qualify for conventional rates) are a bit higher but not exorbitant, i.e., 5.25% for our most recent.

    I wanted to diversify into multifamily, but nothing I looked at on the west coast made sense.

    We have four luxury VRs that we travel to frequently. Cardinal rule, you must stay in your VR frequently to see items that need to be fixed. When guests are paying up to $600 a night or more (seasonally) they reasonably expect near perfection. You live and die on reviews, so it is a very different business than conventional landlording.

    For me, as a CCIM, this has been the investment with the best return since I moved to Oregon four years ago.

    It is not for everyone, there is a high upfront cost, and as another reader pointed out, many localities are severely restricting or outright banning vacation rentals, so that should be the first issue you research, and thoroughly understand, before jumping in.

    There have also been issues with vacation rental websites. Some are absolutely horrible to deal with if there is damage to your home, which is something most VR owners are grappling with now.

    My cleaners asked me if I have a permanent home, because they see me staying at our VR’s between guests to fix things. That was pretty funny (the answer is yes, but it is two hours away, and far less pristine than my rentals). The other irony is that I am in the vacation business, but haven’t had a vacation in six years.

    There are tons of other considerations – how to furnish (I am the thrift-store, furniture renovation queen) criteria for choosing a good VR, setting rates, etc., that your book probably addresses. I am looking forward to reading it.

    A different but fun way of investing.

    • Ben Leybovich

      Laury – thanks for reading!

      As a CCIM you understand that a cash flow investment with basis in VR is so much more lucrative because of VOM. No magic in this whatsoever for folks who understand a bit of economics. I will address this in future posts, and I most certainly covered it in the book.

      How to furnish. Which pictures to take (and not take). What footprint and size of unit. All of that matters and has to be addressed. I agree completely!

  20. Kayla Lyon

    Super excited to read the rest of this! (Tease, party of one? ha) This is pretty much what I’ve been trying to figure out… My husband and I are in our early 30s expecting our first child very soon and the days of roommates and futons are long behind both of us. We’re a military family and I’ve been trying to figure out a way to take advantage of moving every few years and turn it into a benefit by house hacking and building our portfolio, but we’re very uninterested in roommates! Looking forward to the rest of the story, thanks!

    • Ben Leybovich

      Luxury House Hacking is your game. I have 8 year-old twins and Patrisha and I couldn’t be more comfortable from a privacy stand point. You need a particular kind of a foot-print, though…

      Thank you and your husband for your service!

  21. jack middleton

    Thank you for this book. I have read about house hacking, but while reading this book I realized that my understanding of the concept was limited. Thank you for teaching me a way to marry two techniques in a way I had not considered. The ideas you presented have prompted my wife and I to change our idea of what our next rental property is going to be.

    We learned from the Rich Dad advisors that education is worth paying for, and this was well worth the modest cost of the book. We can’t wait to learn about your next creative idea. ?

    • Ben Leybovich

      Fantastic, Jack!

      The problem with the traditional view of house hacking is the same problem with traditional view of anything – it’s too narrow. The money almost always is in the synergy of several good things. Why? Because you are amplifying the benefits and at the same time diversifying the risks.

      This is exactly what my version of Luxury House Hacking accomplishes, I think. And, Jack – I only teach what I know from personal experience. The next one is still under wraps for now 🙂

      Thank you for buying the book, Jack. And thanks for reading this article!

  22. Sharon A. Johnston on

    Aloha Ben,

    Looking forward to the new thoughts ! I’m beating my brain daily, with indecisive brain spinning.
    I live in beautiful south florida, renting ocean front property for myself at $1700.00 per month.
    Prior to that decision, I sold my tiny ocean front condo, which was costing me in maintenance fees. Purchased a duplex in a (C) neighborhood , paid in full with the proceeds from the tiny condo. The duplex pays for the rental.

    Here is my dilemma, so to speak.
    I’m single, 61, self employed and know better than to keep paying rent. Although, to live this lifestyle , purchasing is slightly more costly than renting. The market is moving quickly, I’ve been searching for another multifamily and chasing the market…….this time I would be utilizing an investor loan, the cash flow would be minimal and now I would be in debt.

    Torn between, another multifamily or should I invest in a condo that pays for itself by a renter in a better area ?
    Want to scale up, and have a place to call home.

    Best of both worlds, my duplex income could definitely pay for a condo mortgage opposed to renting, but I’m unable to obtain traditional lending, self employed. Hence the investor loan, which prohibit owner occupied.

    Really twisted on which direction would be best at this stage of life. Your thoughts would be greatly appreciated.
    All the best to yoy and your family.

      • Sharon Johnston on

        Hi Ben, carry over losses are on my tax returns from a business I dissolved in Hawaii.
        Lenders requested my returns, and that is frowned upon.
        Only investor loans don’t require my tax returns, 20 to 25 percent down. Which really depletes my only savings.
        Not comfortable with that idea.
        Hope that adds to the clarification.

        • Sharon Johnston on

          Aloha, I was sincere when I reached out to you. I did reply to your question pertaining to my lending experience. I’ve only received replies about your book.

        • Ben Leybovich

          Interesting, Sharon – so are we talking actual losses or paper losses that make your bottom line look bad? It’s difficult to offer any thoughts, of course, without knowing much more about your situation, and this is certainly not the forum to get into all of that. But, I am assuming you have other income aside for the business which you dissolved, right? I am assuming it’s seasoned somewhat? With the dissolution of the business you lost the income but also the monthly liabilities? Hard to say what’s going on. I agree, with availability of 5% and even 3.5% down anything else seems silly, but hard to say what’s going on with your criteria for qualifying…

  23. Mark Spidell

    Nice build up Ben! I am on the edge of my seat. Airbnb while you are out of town seems like a possibility, but I don’t think that is your style. Home office tax strategy perhaps? Paying yourself rent? I could be down with that. Ben RULES!

  24. Shasha Jhaveri

    Oh such a tease Ben! I can’t wait for the next installment. My husband and I were just chatting today about wanting to get another investment property and living in an apartment vs. getting a house of our own and delaying the investment (which isn’t really what we want).

    Very curious as to what Option C could be. How much longer is “soon”?

    • Ben Leybovich

      Shasha – My way of House Hacking would be perfect for you guys! I’ll post the next installment by Monday, or you can look up the book 🙂

      Thanks – this is why I wrote this. I backed into it and it hit me over the head…this is perfect for so many folks. Got to write a book…BAM!

  25. Jerry W.

    I have been waiting with bated breath for your new articles since you moved south to a warmer, possibly nicer area. I have also met Patrisha online and agree that your smartest decision in life may not have been her smartest. She seems intelligent logical, and and extremely pleasant for having spent so much time around you.
    I must admit I believe you are very intelligent, and quite articulate as well. this is what makes me so anxious to read your new articles. From the moment I heard you were moving south I knew you were going to write something very intelligent, and very enlightening This book must be the equivalent of drinking the finest of wines while eating a massive dish of crow. It will be wonderfully seasoned and properly cooked, but I know crow when I see it.
    For all the advising being done on making a profit from every purchase and doing the right things financially in our life, like cutting out Starbucks and drinking home brewed coffee, at the end of the day we make money to consume it, to better the lives of those we love. So despite all of your many articles on why you should not own your house, or not buy a house in too nice of a neighborhood, or only spend a small amount on your housing costs, the end result is often the RIGHT choice is not about what we can save, but what we can afford to provide to the people who make getting up each day worthwhile.
    I truly am looking forward to more of your articles and reading your book, but will always a chuckle to know that no matter how wonderfully and intelligent it is written it still has a a huge bowl of crow in it.
    When my son went to buy his first home and I came down to help him look I really emphasized how nice it was that one of the houses had a rental in the basement and a mother in law house out back. Eventually the girlfriend moved in, the downstairs renter was moved out and the place became less the bachelor pad and more the elegant house. The mother in law house out back still pretty much pays his mortgage. Due in part to dumb luck his rental income has gone up considerably and I am left wishing I had bought there along side of him.
    I am trying out my first vacation rental, and am racing to get it ready in time for the total eclipse coming through Wyoming. If you wish to see totality of eclipse we are in the path and I would love to have you be my first guest.(For a very reasonable fee) We are not the destination capital of the US but I am looking forward to see if the concept works in my area.
    Thank you for the enjoyment from your article and for reading my overly long poke in the ribs. Best wishes.

    • Ben Leybovich

      Hah well, now we are talking, Jerry!

      Point by point:

      Your conclusions are absolutely correct about Patrisha. Like because you were concerned about propriety you omitted “hotter than hell”, but I can read between the lines…cause…like…I’m not 27 🙂

      About the book – in the current real estate cycle it’s (for the most part) choosing the smaller pile of crow to step in, if you know what I mean. I totally stand by the Luxury House Hacking as the strategy of choice today.

      Why? Because I agree with you. Life is to be lived, not penny-pinched. However, the reality that this costs money is not lost on me, and Luxury House Hacking fits the bill.

      More article’s are coming. I wound’t miss this opportunity to make the case: This is how Scott Trench does it, and this is how Ben Leybovich does it. You chose 🙂

      Jerry, details are important with vacation rentals. Location, size, footprint, staging, amenities, pictures, etc. I discuss all of the above.

      Looking forward to your further commentary, Jerry! Always do!

  26. Andrew Ziebro

    We moved into a small totally rehabbed bungalow in Cleveland 3 years ago. Our first house, a year into our marriage. A year later, trying to figure out what to do with the finished basement (man cave/dance studio, etc.) my wife said, “let’s furnish it and put it up on Airbnb”. Brilliant. That amazing cashflow led us to look for another Airbnb property and that quickly led me into full time investing from the restaurant business. We’re currently looking to upsize (2 babies later and a soon to be moving in mother in law) and we don’t look at anything without considering how to Airbnb it without conflicting with our family’s life.

  27. “don’t tease me bro” great read and I think I have something for you that can add even more income and not have to do any real extra work. But I won’t know for sure until you complete this cliff hanger.
    Good luck!

  28. Vanessa Brown

    I am somewhat familiar with the area (Chandler) and I know that most parts of Chandler are pretty HOA-heavy. I assume, given that you’re sharing all of this publicly, that your HOA doesn’t have any restrictions on short term rentals? Is this part of the risk profile that you discuss more in your book? I can imagine in “luxury” communities, such as the one that you are discussing, that neighbors might be more leery about someone running a transient rental business?

    • Ben Leybovich

      Vanessa – you’re absolutely right. There is regulatory risk. I discuss in detail in the book my thinking. However, the owner before me was doing it. Others in the neighborhood are doing it. No neighbors in front or back, and neighbors to the sides know, and I am a good neighbor 🙂

      There are risks with every strategy. And this is a risk. I am with the governor on this issue 🙂

  29. Worst article I’ve read on BiggerPockets in a long time. No content. All fluff and propaganda for something so amazing it just had to be reserved for another time. What a waste.

  30. Shane Baum

    Ben this was a great read!

    As many have said before I will be eagerly waiting to read the rest. I have often pondered the answer to this, as I am sure many on BP who have read Rich Dad Poor Dad have too. Within the last year I have played with the idea of having a (legal) commodity pay for the mortgage. Now I am not saying that everyone could make it work with my idea of using agriculture to pay for a residence. But someone with the experience and background could possibly use the selling of commodities to pay for the mortgage.
    I look forward to your next segment.

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