House Hacking
I want to share a “hack” that, when properly done, can have a huge effect on your wallet and the wealth of your family. I’m talking about hacking your housing and living for free. I’m talking about building wealth automatically. I’m talking about buying an owner-occupied multifamily property and getting paid to live for free.

It’s often called an “owner-occupied multifamily property” but you probably have heard other names for it, like “duplex,” “triplex,” or “4-plex.” There is a good chance you’ve even rented a unit in one of these places in the past or you know someone who has. They exist in every market, every neighborhood, and every price point – and by purchasing a small multifamily property, living in one unit, and renting the other units out – you can live for free and get paid to do so.

House hacking can take other forms – like buying a house and living in the basement suite or garage apartment. Check out this guy for example who paid off his mortgage super fast.

Why Purchase a Small Multifamily?
By purchasing a great small multifamily deal, the rent that your tenants pay each month can cover all of the expenses for the property – and more.  For example, if you buy a 4-plex, live in one unit, and rent each of the other units out for $1200 a month, you could be making a certain amount per month in income. If your mortgage, taxes, insurance,  utilities, and maintenance expenses come to just $3000 – you could get paid $600 a month just to live in the home.  

Where to Find Small Multifamily Properties
The easiest way to find them is by speaking with a real estate agent. Ask your family and friends for recommendations and start up a conversation. 

Keep in mind, however, that you are only looking for properties that have 2, 3, or 4 units. Once you hit 5 units or more, the entire world of real estate changes into commercial real estate. So for now, focus on the duplexes, triplexes, and 4-plexes.

If you want to just start looking, you can also use sites like Realtor.com, Zillow.com, HAR.com (i.e. in Houston, TX) or Trulia.com to start looking at properties. With each of these sites, you have the ability to limit your searches to only multifamily properties.  Start looking at the cheapest properties in your area and try to find neighborhoods that you would want to live in.

Why purchase a single family home (SFH) with a basement or garage apartment?
Personally, I think buying a SFH is the best way to get into real estate. Why? The numbers are smaller, its easier to manage and it will give you experience being a landlord. Its much easier to deal with one tenant than 3-4. Also, these places are typically cheaper, require a smaller downpayment and its less likely you will make a mistake on the math.

There are risks involved, for example, here in Houston, TX - a common problem is that a local subdivision or homeowners association will not allow you to have more than one family living on a property. You can find this out just by calling the subdivision or the property management company before you start making offers.

How do the numbers work? Here's an example I was working on (deal didn't go anywhere because of the subdivision rules). 
  • List price of $205,000. 
  • Offer price would have been $195,000
  • Downpayment of 5%: $9,750
  • Closing costs of say $5,000
  • Total upfront costs: $14,750
  • Monthly rental income $1,400 for the house
  • Vacancy assumption of 8%
  • Result would have been slightly cash flow negative of around $300. 

So in this case, it would have cost me $300 a month to live in a garage apartment. That's pretty cheap "rent" if you ask me. And that's on a cash flow basis. I would still have been paying down my mortgage by around the same amount. So, all that's happening here is that I get almost free place to live and I pay down my own mortgage.

Can you think of how quickly you can build wealth while almost essentially eliminating your largest cost in your life? In 5 years, after paying yourself $300 a month... you'll have created equity in your home and plus started perhaps a nice investment portfolio using the money you used to pay on rent!
Renting a car can be tedious.

I recently had some work done on my car by a "small time mechanic" who does not provide loaner vehicles. I saved lots of money by using this mechanic, so it was worth it to rent a car during the time my vehicle was in the shop.

For the first time, I tried Turo. Uber calls itself car sharing, but this is real car sharing. You have individuals that rent their own personal cars through the Turo platform.

Initially I wanted to rent a car for 3 days. I was quoted $281 from National Car rental for the airport - which was a $30 Uber ride away. Seemed like a bit much for a car I was going to use to commute to work and/or a grocery store. I tried using some aggregators and found the cheapest was $47/day - still cheaper than National.

I ended up signing up for and reserving a car (a nice 2014 Kia Soul) at 4PM on a Sunday and took possession of the car 3 hours later at 7:30PM. I was charged $115 for the 3 days - which is pretty competitive for a major cities during the week. Add on the fact that the owner of the car picked me up at my mechanic for free!

I will be using Turo in the future. Evidently it can be used all over the US in major cities. Here is my referral link - disclosure: I get $25 credit if you sign up using my link.

PictureMy 1st car - a 1972 Plymouth Cricket
In North America, many of us grow up in cities/towns where having a car is a sign of adulthood. I remember teasing other kids who didn't get their driver's licenses as soon as they could. We grow up believing / thinking that owning a car is a necessity and a right. I wanted a car so bad when I got my driver's license that I bought a 1972 Plymouth Cricket was $200. I sold it a year later for $220.

I have lived in 5 different cities/towns in North America. My hometown - where having a car was needed. A small city - a car was also needed. A big city - where I had a car, but probably didn't need it). Another big city that was very transit friendly. And unfortunately, right now, I live in a city where owning a car is a necessity. Some American cities are unfortunately not bike / public transit friendly.

When I lived in Montreal, I was transferred there by a company that initially told me that the transfer was going to be only for a few months.  I did not move many of my personal belongings to Montreal (including my car). I inadvertently was trained to live without a car. Eventually, after a few months, it became clear that I was going to be needed for more than a few months - by that point in time, I decided to get rid of my car.  Let me explain how I felt that my way of life was actually IMPROVED and how I saved money.

Many people equate retirement with spending lavishly, traveling in style, or playing golf everyday (such as this NYT article I read the other day). While I do agree with the mathematics of the first 50% of the article (yes, of course try to increase your present value (PV) by investing in yourself and your own earning power), I disagree with the second 50% of the article. The second half of the basically makes it sound like retired people are pathetic / bored / not contributing to society. 

I plan to retire early. As I write this article, I come up on my 30th birthday. I am starting to build up my portfolio so that one day I will have enough passive income to either retire entirely, or do work on a part-time basis (perhaps some consulting in my professional, some teaching in the profession, etc). I am hoping to get out of the full-time work force well before 60. 

Getting your first credit card in the United States can be daunting.

Its a tricky system. You can't get a credit card without having a credit history. You can't get a credit history without getting a credit card. 

Also, its nice to have a credit card for expenses when you first arrive; however, you may not immediately have a Social Security Number (SSN) which might cause problems with most banks. 

Keep in mind that a lot of foreign banks issue US dollar denominated credit cards, but most of the time this will not help you because it is still issued by the foreign bank. Your goal here should be to get a credit card and start building US credit history, which can help you qualify for loans, mortgages, cell phones, etc.

Here are my suggestions: