100%+ Return On Initial Investment By House Hacking With Joseph Hogue:
Joseph Hogue and his wife purchased their first home as a beat up foreclosure after the housing bubble in 2010. They paid a mere $25,000 cash for the home, and were able to walk away from it with over $30,000 in profit! An incredible return on investment with a great story of hard work, sweat equity, and a lifelong real estate investment memory that they will cherish forever.
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Joseph Hogue And His First Flip
Joseph lives in Columbia with his wife. In 2010, they decided to move back to the US and began house hunting outside of Des Moines, Iowa. This was right in the midst of the housing crisis, and they were able to pick up a foreclosure for $25,000. (Our other guest, Ryan, also picked up a foreclosure to house hack with.) It was vacant for about 5 years, but it had been vandalized and needed a complete gut and remodel. But it was a great opportunity to build a home exactly how they wanted it.
The full remodel took about 2 years and cost $50,000. Because the home was in such poor shape, they weren’t able to move in until 11 months after purchasing it. Once it was livable, they slowly finished the entire home. They ended up selling the home in 2013 for $114,000, leaving a decent profit margin.
What’s crazy is that as while they did the majority of this project themselves, they were both working full-time as well.
While Joseph is a veteran and could qualify for a VA loan, because it was a foreclosure, this was a cash only purchase. But this wasn’t his first real estate investment purchase as he had begun purchasing real estate in 2001 after exiting from the military.
Becoming The Builder
Joseph became very motivated to complete the home so he and his wife could move into it as soon as possible. They moved in when the home was about 75% done.
Joseph was able to tackle many parts of the remodel including electrical, tile, and drywall. However, other tasks like plumbing were not of interest to him so he simply contracted that out.
Andrew mentioned that plumbing would be much more appealing to him, however, Joseph Hogue said that electrical became very simple once he learned the local building codes. However, because the project was so complex, he needed permits and had to visit his local permit office to find the information he needed.
Living in Construction And Saving On Services
After moving in, they fully completed the home about 5 months afterwards. And looking back, there isn’t much he would do differently, except leaving the home. They welcomed their first son in that home, so it was very sentimental.
As for materials, they were able to take their time and find the best deals possible. They used opportunities like Black Friday to save tens of thousands of dollars off retail. And they also used ReStore and Craigslist to save on costs as well.
For Sale By The Owners
They decided to sell it themselves by posting the home on Zillow and Craigslist, and ended up saving about $4,000 in agent costs. And because it was considered their primary residence, they did not have to pay capital gains tax on it.
The Famous Six
What is your favorite personal finance resource (blog/book/podcast/etc)?
PeerFinance101.com – A shameless plug for his own personal website
What’s your favorite real estate related resource you’ve read recently?
What is your favorite travel destination so far?
Greece and Sicily while in the Marine Corps.
Where will you travel next?
Him and his wife are moving back to the United States later this year, and would love to do an RV trip across the US.
What is the biggest bucket list goal that you haven’t accomplished yet?
Scale my company to have investors.
What is your favorite life hack?
Building our own home.
Be sure to check out our Ultimate Guide to House Hacking for a great overview of the different styles of house hacking and different types of tenant bases.
Check out the home page for “The House Hacking Podcast” here.