From high school graduate to real estate mogul before the age of 30.
Today Chantz Ireland joins the show to share how he went from owning a triplex to creating a condo association to buying a 24 unit apartment building before the age of 30 through the power of house hacking.
Here's how you can get started house hacking.
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Chantz got started in house hacking in 2015, two years after graduating from high school, with the purchase of his first triplex. Since then, he has sold that triplex along with his second triplex and purchased a 24 unit building.
Chantz’s House Hacking
Through a series of house hacks, Chantz has been able to earn a substantial profit. Let’s take a closer look at how he made this happen.
Chantz’s First House Hack
Chantz wasn’t familiar with house hacking before this experience but his father had been in real estate and it was something he had always wanted to do. He found a triplex that was three identical side by side 2 bedrooms and 1 bath units. Chantz borrowed $25,000 for a downpayment from his dad and his brother cosigned the loan, he closed on the triplex for $305,000.
When he purchased the triplex, rents on each unit were $700 a month and below market. The monthly loan payment on the triplex was $1,850. So the triplex paid for itself.
FHA requires the borrower to live in the property for a year. The tenant in the middle unit wasn’t an ideal tenant so Chantz let that tenant know he had to move out. Chantz lived in that unit, rented the second bedroom out, and lived for free while renovating that unit. He increased rents to market rates for better cash flow on the other units.
After one of the tenants was evicted because they caused significant water damage to the unit Chantz moved into that unit and rented out the middle unit. He repainted replaced carpets, light fixtures, gutters, and the roof for each unit. The flooring was replaced where needed. When finished, he rented the units for $995 a month.
Tip: How to Find Good Tenants
List your properties on Craigslist and check Rentometer to compare prices. If you price your unit right you’ll get a good tenant. Use Cozy.com for credit and background checks. You can have prospective tenants send their information to Cozy and pay the $40 fee.
Chantz’s Next Move
Chantz decided to move out of his first triplex because he wanted to grow. He started a motivational Facebook page (Motivation Kings) in October and sold the page for $18,000 which he used for a downpayment on his second triplex.
Chantz refinanced the first triplex loan into a conventional loan so he could get an FHA loan to buy a second triplex.
His second triplex was a 3 bedroom 2 bath unit in front with a 2 bedroom 1 bath duplex and a studio and garage ten feet behind the front unit. Chantz lived in the 2 bedroom 1 bath. The triplex was appraised for $330,000 and he purchased it for $305,000.
Chantz renovated and subdivided the triplex and turned it into an Airspace condo. The upstairs rented for $1,100 a month and $850 for the downstairs.
Chantz decided to subdivide the property because it was one large single-family house in front with a 2 unit with a studio and garage in the back. Because both units shared water and sewer it was cheaper to turn it into a condo association and have each unit pay to cover water and sewer. He was hesitant about calling the units condos because condos sell for lower than single-family residences. But he realized the numbers would work out and it was a huge win. The cost to turn the triplex into a condo association was $15,000.
He sold the 3 bedroom 2 bath unit in front for $325,000 a year and a half later which paid off the remaining $275,000 loan.
Chantz’s 24 Unit Apartment Building Purchase
Chantz decided to scale up. He sold his first triplex for $585,000 and walked away with $250,000. Not wanting to pay huge capital gains, he put it into a 1031 and had 180 days to find and close on another property.
With a 1031 tax exchange, you can take proceeds from the sale of real estate and put them into a like-kind deal that’s similar or larger to defer taxes.
After listening to a Mike LeBlanc podcast, Chantz found two investors and bought a 24 unit for $1.3 million.
He put in $260,000 for an 80% share and each investor put in $50,000 for a 10% share. The investors will get 10% of the cash flow for the next five years and 10% equity after the sale.
Chantz recently sold the back duplex for $270,000. He considered buying the 24 unit by himself but he wanted to show future investors he is a good risk and has more money for the next deal.
Four Lessons Chantz Learned
Chantz learned that getting started with intent and consistency can set you up for success. You can get started house hacking without a multi-unit building. Find a good house to live in with three or four bedrooms and have someone cover your mortgage. Education yourself over time: use Google and resources like Bigger Pockets. Repeat the process and go bigger. Free up time with a property manager.
He regrets missing out on deals. His future self would tell his past self to “find someone with money and good credit and start an LLC.”
The Famous Six
What is your favorite personal finance resource?
Rich Dad, Poor Dad
What is your favorite real estate resource?
Bigger Pockets and the Mike LeBlanc Apt building podcast
What has been your favorite travel destination so far?
What is next on your travel list?
Hawaii and Costa Rica
What is the biggest bucket list item you haven’t accomplished yet?
He wants to skydive out of a plane at Burning Man.
What is your favorite life hack?
Connection with information. Being able to Google anything, call anyone, listen to podcasts to learn how to do things
How to Connect
You can reach out via Instagram @investwithChantz.
Learn how to get started house hacking with our ultimate guide to house hacking.