Home Poor to HUGE Money Stream by Doing THIS: Robuilt’s Rags-to-Riches Story

Ashley:
That is Actual Property Rookie Episode 315.

Rob:
I’ll give my dad and mom all of the credit score on the planet as a result of I had no concept that we have been poor, however I do bear in mind there was this someday I got here house and my mother was bawling on the kitchen desk. I bear in mind being like, “What’s incorrect, mother?” And he or she was like, “You texted someone so many instances. Our invoice is $600 and we will’t afford this.” That was a tough second for me as a result of that was the primary time it clicked with me that $600 is all the things for sure households. That was that second the place I used to be like I’ll by no means let my household really feel like this once more. I’ll make it possible for my household by no means feels this manner.

Ashley:
My title is Ashley Kehr, and I’m right here with my co-host, Tony Robinson.

Tony:
And visitor, Rob Abasolo.

Rob:
Whats up.

Tony:
What are you doing? What are you doing?

Rob:
Oh, sorry. I’m marching in in your intro.

Tony:
Properly, anyway, welcome to the Actual Property Rookie podcast the place each week, twice every week, we carry you the inspiration, motivation and tales that you must hear to kickstart your investing journey. And also you guys, in the event you didn’t acknowledge that voice, we do have somebody barging on the intro at the moment. However earlier than we get to that man, Ashley, what’s happening in your neck of the woods? We haven’t performed any boring banter shortly.

Ashley:
I do know, we actually haven’t. I’ve been doing loads of wake browsing. I’ve obtained two properties underneath contract. One goes to be a home flip and the opposite one goes to be a BRRRR. What about you?

Tony:
We nonetheless have this ever ongoing campground that we’re doing in West Virginia, nevertheless it seems like we’re lastly getting near the end line on that one, so fingers crossed, we will begin breaking floor earlier than the yr is over. And truthfully, that’s just about it.

Ashley:
Tony, when you shut on that although, I actually need to do a rookie reply on that complete technique of how that began.

Tony:
Oh, completely.

Ashley:
Yeah, a extremely attention-grabbing one.

Tony:
Yeah. We’ve realized lots. Issues went properly, issues went haywire, nevertheless it looks as if we’re again on observe. However truthfully, most of my focus proper now’s constructing out Robinson Capital. That campground could be the primary acquisition underneath that new firm and actually simply attempting to deal with extra business acquisitions.

Ashley:
Properly, at the moment, we have now a particular visitor with us. We’ve the co-host of the BiggerPockets podcast, and you might know him-

Rob:
Whats up. Whats up.

Ashley:
Do you need to intro your self?

Rob:
No, no, you do it. I prefer it when different folks speak about me.

Ashley:
You could know him as Robuilt. You’ll have heard him on the podcast or you could have watched him on YouTube or seen him on social media. So Rob Abasolo, welcome to the podcast. I wish to know, what’s one nice takeaway that you just gave to us on the episode at the moment?

Rob:
I might say the best takeaway that somebody will get from at the moment’s episode is knowing why it’s so essential to produce other folks pay to your mortgage.

Tony:
That’s a superb one. I might add to that, Rob. I like that. However I additionally suppose the thought and idea of beginning small, testing and iterating to larger issues is a extremely essential theme out of your episode at the moment as properly.

Rob:
Yeah. You bought to scale accordingly.

Ashley:
So what we do on this episode is we’re going to undergo Rob’s childhood journey, ranging from his early years and issues he’s realized from his childhood that formed him who he’s at the moment. He talks about dwelling underneath your means, frugality and what his household went by means of rising up, and you’re going to get the prospect to study much more about Rob and the way he constructed his legacy, beginning with home hacking.

Tony:
We get actual deep in at the moment’s episode. We get Rob on the remedy sofa, however general, plenty of actually good issues come out of at the moment’s episode. Earlier than we hold shifting, I simply need to give a shout out to somebody by the username of MMK2255. They left us a five-star assessment on Apple podcast. This particular person says, “So many due to Ashley and Tony. I like the leisure, data and motivation from the host and their visitor. I began listening 4 months in the past and simply closed on my first property. I met Ashley at a convention just lately and he or she’s much more real in particular person. My subsequent aim is to fulfill Tony. Sustain the boring banter and thanks for all the things.”
So MK, we recognize you. For all of our rookies who’re listening, in the event you haven’t but, please do take a couple of minutes to depart us an sincere ranking and assessment. The extra views we get, the extra of us we will attain and the extra of us we will attain, the extra of us we can assist, which is what we love doing right here on the Rookie Podcast.

Ashley:
In the event you haven’t already, ensure you verify us out on YouTube at Actual Property Rookie or be part of the Actual Property Rookie Fb group. Rob, welcome to the Actual Property Rookie Present.

Rob:
Thanks.

Ashley:
Thanks a lot for becoming a member of us at the moment. We’re very honored to have you ever on. And a few could also be questioning why we have now you on at the moment, and we’re going to return to the rookie years, and we’d actually like to start out with childhood. So Rob, please indulge.

Rob:
Sure, sure. It’s been a very long time since I’ve been a rookie. Properly, hey, to start with, let me simply say thanks for having me on the pod. So excited to be right here. I put in my request within the kind a few years in the past, and so very joyful to lastly have my second.

Ashley:
That’s if the episode airs, however yeah, keep tuned.

Rob:
That’s proper. You guys will let me know on the finish, proper?

Ashley:
Yeah. So Rob, first, earlier than you go into your childhood, I suppose, who’re you?

Rob:
Okay. So my title is Rob Abasolo. I’m the co-host of the BiggerPockets Podcast and the Actual Property Present particularly. I’m a YouTuber, content material creator. I’m an actual property investor specializing on the planet of Airbnb, and I’ve been doing this for about seven years now and have gone from zero to a comparatively first rate portfolio that I’m actually pleased with that took a very long time to get right here, however couldn’t have performed it had I not had a number of actually, actually arduous, tough, adolescence moving into the true property area. Is {that a} good introduction? Did I do it proper?

Ashley:
Sure, excellent. You’re on the best path right here. Okay, so let’s return to your childhood. What was it like for you rising up and the way do you are feeling that that molded you into the investor you might be at the moment?

Rob:
Completely. I grew up actually simply watching my dad and mom do the final word sacrifice, dwelling out the final word sacrifice for his or her youngsters. And what I imply by that is my dad and my mother, they’re immigrants from Mexico. My dad was a physician in Mexico and my mother labored with them. I imagine she was a nurse and that’s how they met. It’s fairly the romantic story. They usually had a fantastic, nice life in Mexico and I believe a extremely nice trajectory for the place they might go, however they needed to do this complete loopy factor of shifting to America and offering a greater life for his or her youngsters, and that’s precisely what they did in my perspective.
I actually had no thought how tough it was financially for my dad and mom, rising up, as a result of as a child, you don’t actually see that factor. However what I did see was that my dad and mom have been all the time working. They have been all the time working second jobs. Lots of people would ask right here, why didn’t your dad simply transfer his license over to America? He was unable to. He didn’t converse any English and he tried to maneuver his physician’s license over to America and he took the take a look at twice and he failed, and it’s as a result of he actually simply was unable to do it as a result of not solely was he struggling to study English and do all that factor, however he’s additionally having to work a minimal wage job to essentially present for the household and all the things like that. So I believe after a few instances of giving {that a} shot, he simply determined to make the choice like, hey, I can’t hold pursuing this dream of changing into a physician in America. I’ve now obtained to bootstrap this factor, work jobs present for my household and all the things like that.
And in order that was actually robust for me as a result of I bear in mind pondering as a child that my dad is the neatest man I’ve ever recognized, and he would speak to me about well being and issues and physician stuff as a result of I suppose he didn’t actually get to speak about all of it that a lot at work, however he labored a minimal wage job for thus lengthy. And I believe all of it clicked for me as a result of I bear in mind someday, they have been bringing me to an workplace constructing at night time and I didn’t actually know what was taking place. It was like third or fourth grade. And my dad and mom have been working full-time jobs in the course of the day, and as quickly as they completed these shifts, they’d mainly come decide me up from college. I believe we’d eat after which they’d go work one other job as janitorial employees at these business buildings. And that was actually complicated for me as a result of I didn’t actually grasp it.
And thru this journey, I simply noticed them all the time doing various things to earn more money till finally, they went and so they purchased a home and so they began fixing it up and they might take me to the home each single day. And I bear in mind they bought it and so they flipped it and it was such an enormous deal for them as a result of I believe they made $20,000 or $25,000 and it was an enormous, big monumental second for my household. They went and so they did one other flip and so they made 20,000 or 25,000 and, once more, life-changing revenue for them.
After which finally, they go and so they go to a tax public sale and so they purchase this superb home within the heights of Houston, which is definitely, it’s a extremely, actually good a part of city and so they thought they obtained a as soon as in a lifetime deal, however I believe they didn’t actually know the English completely, the authorized phrases or something like that. And I noticed them mainly purchase the liens on the home. They didn’t even purchase the home. They purchased the debt related to it or one thing. They usually put each single cent, all the things they’d ever owned, any financial savings into this home till finally, the proprietor got here again and took it from them. And that was a disaster financially. They by no means moved on with actual property after that. That’s the place they have been like, “We will by no means do that once more.”
And I noticed this firsthand, and I bear in mind pondering at that second for me like, okay, my dad and mom got here right here. They lived the final word sacrifice for me. I didn’t actually perceive actual property however I used to be . They have been all the time telling me, hey, actual property, that is how folks turn into rich. They usually tried it and so they failed, and I felt it was my responsibility and my duty to hold on the torch and end what they began.

Tony:
Rob, first, thanks for being so clear together with your story. I believe lots of people come from comparable backgrounds the place they aren’t handed success on a silver platter and so they need to grant it out. However one thing I’m interested in as a result of I see parallels in my very own life the place my dad and mom divorced once I was very younger. I spent most of my adolescence dwelling with my mother. She labored two jobs at loads of factors simply to maintain the lights on. I developed virtually this shortage mindset round cash as a result of issues have been all the time tight rising up. And I nonetheless see how that impacts me as an grownup in numerous methods. How has that impacted you? Your dad and mom got here throughout the border?

Rob:
Huge time.

Tony:
Yeah. Simply speak by means of that. How have you ever seen that play out as an grownup?

Rob:
So like I stated, once I was a child, I’ll give my dad and mom all of the credit score on the planet as a result of I had no concept that we have been poor. It’s arduous to even say that due to the life that they gave me and the way a lot they gave to all the time make it really feel okay for me as a child and protected as a child. However I do bear in mind there was this someday, I got here house after college, it was in seventh grade, and it’s really once I had first met my now spouse however then my crush. I used to be texting with Ash, my spouse, hundreds of instances. This was again within the day when limitless knowledge plans didn’t exist. And I got here house and my mother was bawling on the kitchen desk and I bear in mind being like, “What’s incorrect, mother?” And he or she was like, “You texted someone so many instances, our invoice is $600 and we will’t afford this.”
That was a tough second for me as a result of I believe it was the primary time it clicked with me that it’s like $600 is all the things for sure households. And in order that was that second the place I used to be like, “I’ll by no means let my household really feel like this once more and I’ll make it possible for my household by no means feels this manner.”
And so it actually was these issues the place rising up after that, I used to be a budget man. I used to be the man that my associates made enjoyable of. I used to be the man that was all the time beginning facet hustles. I bear in mind I fell for this infomercial one time that was referred to as the Biggest Vitamin within the World, and you’ll mainly promote these nutritional vitamins for, it was a multivitamin for 20 bucks and in the event you bought it to twenty folks, they’d provide you with a thousand {dollars}. And I bear in mind all the time attempting these bizarre various things to simply earn a living. I might be at work at my very first job and I might look ahead to the conferences at midday that have been catering lunch. I might watch them from my desk or I might ask my coworkers that have been subsequent to that assembly to alert me the second that that assembly was over in order that I might run to the kitchen and get free lunch.
My associates all the time made enjoyable of me for it, however for me, I simply all the time felt like I needed to all the time save each single greenback that I ever had. I needed to be tremendous low cost in order that mainly, I might stash my cash and hopefully put it in the direction of one thing that will construct one thing for me in a while. I’d by no means actually realized that finally, that will culminate into actual property.

Ashley:
That your pals made enjoyable of you for, you’re speaking highschool into maturity?

Rob:
Yeah, it was properly into maturity. It began in highschool. They might all the time be like, “Rob, you’re the deal man.” However then in my early a part of my promoting profession, that was it. And even till the top of my promoting profession, truthfully, till three or 4 years in the past, I used to be like this. And my very first promoting profession, I used to be making $40,000 a yr, which at the moment was all the things. I used to be like, “Oh my, gosh. It’s probably the most cash I had ever made in my life.” And so I assumed that getting this job, I used to be going to be financially free and impartial. My spouse was nannying. She was making $12 an hour. And it turned out that after the entire bills, we simply didn’t have that a lot left over. And so I had all the time remembered my dad saying, “Hey, actual property is the way in which. Actual property is the way in which.”
And so we obtained a tax return finally that was 5,000 bucks or one thing, and I used to be like, “Let’s use this as a down cost for a house.” And mainly, that tax return is what funded the very first home that I ever had, and we have been tremendous home poor, and that basically accelerated how low cost I used to be at work and all that stuff as a result of we have been placing all the cash we ever had into our first home.

Ashley:
Are you able to give us just a little extra perception as to how worthwhile you suppose that was that you just lived beneath your means as to you didn’t go and spend lavishly though you bought this new profession as a $40,000 job, which on the time was some huge cash? So what recommendation are you able to give to our listeners as to how they’ll dwell beneath their means? They’ll comply with those self same rules of that frugality. And oftentimes, I believe frugality is regarded upon like, oh, I don’t need to be frugal, however extra of it’s simply dwelling beneath your means and sustaining that stability of how to not have that way of life creep.

Rob:
Yeah, completely. Properly, my dad all the time stated sacrifice all the things for a few years after which all the things that drips from the tree is honey. That’s a unfastened translation of what it was. He all the time stated it in Spanish, however mainly that all the time caught with me that it was completely okay to dwell cheaply, proper? As a result of in school, as a child, I didn’t have lots, and so it wasn’t actually the most important adjustment for me to get a full-time job as a result of I used to be all the time tremendous fearful of not having something. And so for me, I all the time felt it was value it to sacrifice consolation, sacrifice associates, sacrifice social life greater than something. And my spouse was on board too.
And I want I might say that there was an enormous technique right here. I simply knew that we didn’t have cash to spend and so there was no cause to spend it. There have been so many moments originally of my profession in actual property life the place my spouse would go spend 5 bucks at Goal and actually immediately, 5 minutes out … as a result of I used to be checking my financial institution assertion each single day. I might textual content her and I’d say, “What did you purchase at Goal?” On a regular basis. And that’s embarrassing for me, however we simply didn’t have it. So we have been all the time attempting to stash away each greenback as a result of I used to be simply in search of the chance that it might strike.

Tony:
One factor I need to add right here, Rob, is that you just talked about taking that first tax return and utilizing that as your seed cash, and we’ve heard that story from numerous folks. Ashley Hamilton, she’s the Detroit investor.

Rob:
Yeah. She’s superior.

Tony:
She has some tremendous well-liked podcasts on the Actual Property Present. You guys ought to return and hearken to hers, however that’s how she began, together with her tax return. I suppose let me ask this one query. For lots of people, it’s simple to get … For some folks, that’s the most important verify they get yearly, is their tax return. How tempting was it for you I suppose to go put that into one thing else versus investing into actual property? And the way did you may have the self-discipline to make use of it in the direction of one thing that was actually going to learn you long run?

Rob:
So this was one thing that basically clicked for me in school as a result of I bear in mind my greatest buddy, my roommates, we have been paying a lot cash in lease. I believe our place was two or 3,000 bucks. And I bear in mind one time senior yr, I used to be like, “Man, I ponder how a lot I’ve paid in lease.” And I calculated that over time, me and my roommate had mainly paid 50 or $60,000 of lease to landlords mainly. And I bear in mind pondering, granted, I didn’t understand how amortization labored at the moment, however I used to be like, “Man, $60,000. I might have purchased a $150,000 home and solely owe $90,000.” Clearly, with curiosity, it’s not precisely the way it was, however that did click on for me. That was one thing that was so clear that I used to be paying a lot cash however by no means really getting a profit aside from clearly a spot to dwell.
And so I bear in mind shifting to Kansas Metropolis for my first job, the one I used to be telling you about in promoting, and I used to be renting a spot for 800 bucks a month, and it was a small 4 or 500 sq. foot place. It was a two-one. So these rooms have been tiny, and it was me and my spouse and our two canine, and we have been crammed in there. I bear in mind being so fed up with being crammed on this tiny place, and I used to be paying 800 bucks and I mathed it out and I used to be like, “Man, we’re successfully paying $9,600 a yr, and I’ve been paying lease for the previous three years.” And the entire calculation got here up once more. And one in every of my coworkers was like, “Yeah. Me and my greatest buddy purchased our home in school and we owned half of it outright.” And he clicked this complete factor with me that, oh my gosh, I wasn’t loopy for pondering that. Somebody really had performed it.
And so understanding the thought early on of constructing fairness in one thing and never simply dumping cash into lease was really a comparatively simple resolution. And so I pitched my spouse, I stated, “Hey, we simply obtained this tax return. We’re paying 800 bucks a month. You recognize what could be actually cool is that if we have been paying $800 a month in the direction of a mortgage, however we personal it, and as soon as it’s paid off, it’ll be value some huge cash.” And he or she was like, “Are you certain? Is that this one thing we will afford?” I used to be like, “Undoubtedly not, however we should always speak to a banker.” And the banker was like, “Okay, you’ll be able to barely afford this. Are you certain you need to do it? Like wink wink, you don’t need to do it.” And I’m like, “Signal me up.”
And so actually early on, I believe the precept … I didn’t know what fairness was. I didn’t perceive the mechanics of it. I simply knew that this concept of proudly owning a home would offer freedom for me as a result of I knew conceptually that when that home was paid off, I had one thing that I might then promote and get all the cash again out. I didn’t learn about refi. I didn’t learn about money outs or something like that. So for me, I used to be like, properly, what am I going to do with the $5,000? I suppose I’ll exit to eat or one thing like that. However for me, I used to be like, no, we should always purchase a home.

Tony:
Rob, speak us by means of that first deal, man. When you satisfied your spouse to take this leap of religion, what are the following steps you took? What did that first deal really appear to be?

Rob:
Yeah, certain. So this home was $159,000, which was actually lots for us.

Tony:
And what market was that?

Rob:
This was Kansas Metropolis, Missouri.

Tony:
Kansas Metropolis, okay.

Rob:
Yeah, yeah.

Tony:
Really, enjoyable truth. I really simply discovered final yr that there’s a Kansas Metropolis in Kansas and a Missouri. So yeah, I’m all the time studying one thing new. I’m geographically challenged.

Rob:
So Missouri is the cool facet.

Tony:
Okay.

Rob:
So there’s a distinction. There’s a distinction. Whenever you go on the market, individuals are all the time like, are you on the Kansas facet or the Missouri facet? They’re each nice. I’m simply messing with all of the folks, however Missouri, for certain, for certain, for certain.
Anyway, so I purchase this home $159,000 and our funds was 125, and we struck out. We saved placing out. It’s humorous. Actual property is that this actually bizarre boomerang the place you strike out, you get demotivated and then you definitely cease. We had placed on gives. Nothing actually match our purchase field. And so we have been identical to, you recognize what? Let’s simply take two weeks and let’s simply take a break. Possibly the home looking isn’t for us. And I bear in mind getting on Craigslist, of all locations, and I discovered a home that was $159,000, and I checked out it, and it was in a fantastic neighborhood and it was all transformed.
And I woke my spouse up and I used to be like, “Babe, verify this out. I believe that is the one.” It was a man that was a flipper that flipped it and he didn’t need to use a realtor, so he listed it on Craigslist. And it’s humorous as a result of I had given up. I took every week or a two-week break, and I made a decision to simply look as a result of I used to be like, yeah, why not really feel the ache once more? And I discover this deal, and it finally ends up being the home that we purchase. It was over funds however simply one thing about it felt like house. I knew that. And so we purchase this home, and the mortgage is a thousand {dollars}, and it’s about 150, 200 bucks greater than what we have been paying however for me, it felt proper, and so we purchase it.
After which it dawns on me. I’ve this loopy thought. My buddy was desirous about working in promoting. He was dwelling in Austin on the time, and we have been in search of interns at our job. And I used to be like, “Dude, you need to apply for the internship.” And he was like, “Properly, the place am I going to dwell?” I’m like, “You’ll be able to dwell with us.” And he was like, “Actually?” And I used to be like, “Yeah, man, it’s going to be nice. You could possibly pay us 400 bucks a month. All payments paid.” And I had chanced on to this unimaginable idea that nobody else had ever performed earlier than the place you lease your home out to different folks to subsidize the mortgage. And so it was loopy that I used to be the primary particular person to ever uncover home hacking, a minimum of to me. I had no thought.

Ashley:
Rob, I’ve to ask, did you provide this to your buddy earlier than you ran it by your spouse or did you a minimum of ask her first?

Rob:
I did run it by her, however he was a superb buddy. He was like a mutual … He was an usher in our marriage ceremony so it was a reasonably simple promote.

Ashley:
Yeah.

Rob:
But in addition, it’s a type of issues the place it’s like, sure, I requested my spouse, however I used to be additionally like, “We’d like this financially to recuperate from all the things else we’ve ever gone by means of.” And so she was like, “Okay, all proper. Let’s do it.”

Ashley:
Did you do a contract or a lease settlement?

Rob:
No.

Ashley:
Something formal?

Rob:
No.

Ashley:
It was simply … Okay.

Rob:
No, positively not. Don’t comply with my footsteps right here, however I didn’t. However he was identical to, “How do I pay?” I used to be like, “How about Venmo?” And he was like, “Yeah, certain.” And I bear in mind getting that first Venmo for 400 bucks and being like, I personal actual property. I used to be like, I felt so wealthy. I bear in mind 400 bucks off of a thousand {dollars} was $600, which is $200 cheaper than my lease. I used to be successful. I used to be successful life. And so then I began pondering like, oh, okay, I’ve obtained this thousand sq. foot basement downstairs. What if I renovated that? It’s a moist basement. Loads of basements in Kansas Metropolis, they’re all moist basements so you’ll be able to’t actually end them out except you do loads of costly work. And we additionally didn’t have the cash to do it.

Tony:
Wait, Rob. So for us Californians that don’t perceive basements, what’s a moist basement and why is that completely different from an everyday basement?

Rob:
So mainly, from my understanding of it, all the bottom, all of the soil, it’s simply significantly damp. It snows lots, for instance, in Kansas Metropolis so there’s all the time snow soften. All of it seeps into the bottom. And my basis was cinder block, which is tremendous porous. So mainly, it simply signifies that it’s not a dry atmosphere, and thus in the event you put drywall over your partitions, it begins to get moist and moldy mainly.

Ashley:
We see that quite common within the Buffalo space too, particularly with older constructed houses that the foundations are like that too the place it’s damp and moist down there. Yeah.

Rob:
I’m actually glad you stated that as a result of for the previous week, I’ve been attempting to recollect who I talked about buffalo wings with and going to Buffalo, after which that particular person was like, “Oh yeah, they’re actually good right here.” It was you.

Ashley:
I do know. And I’m going to in a single day you some Bar-Invoice wings, which I believe are higher than some other wings. So yeah. Simply despatched me your tackle.

Rob:
Oh, man, I’m so glad we figured this out. Okay. Oh, my tackle is 555 Essential Avenue … I’m simply kidding. So I don’t find yourself ending out this basement. However the $400 a month factor simply obtained me hooked on making a living as a result of it clicked with me that it wasn’t simply $400 off of a thousand bucks. It was like $400 off of what I thought-about my freedom. I felt like if I might get my mortgage again or what I used to be paying, if I might save that each month, that was freedom as a result of then I had a thousand bucks to exit and eat with my spouse.
For instance, for reference, enjoyable truth about me, I like Chipotle, everyone is aware of this. However for the primary eight years of my relationship with Chipotle, I straight up solely ever purchased rice. It was 67 cents. I might go to Chipotle and I might say, “Hey, can I get rice in a bowl?” They usually’re like, “You don’t need anything?” I’m like, “That’s all I can afford for now, however thanks.” And so home hacking was the primary time that I might be like, “You recognize what? Sure, I’ll take your entire entree for $8 as a result of I can afford it now.”
And so I used to be actually sprinting to determine how I might offset my mortgage. And I keep in mind that subsequent twist for me was like, all proper, properly, how can I make more cash? And so I believe loads of actual property buyers, they fall into this habit the place it’s like, oh my gosh, backed mortgage. How do I utterly knock it out? I bear in mind wanting to purchase this pipe industrial espresso desk off of Etsy and it was $800, and I used to be like, that’s loopy. This should have been $50 to make this. And so I made a decision to construct my very own, and I used to be down there for 3 weeks and I used to be constructing it, and I bear in mind my spouse was hanging out together with her associates in the lounge and I introduced it up and so they have been all tremendous impressed, each single one in every of them. My spouse was like, “You constructed this?” I used to be like, “Yeah.”

Ashley:
What good timing in your half to carry it up whereas she has all her associates over. Right here’s my masterpiece.

Rob:
However they have been all drooling over it. They’re like, “That is superb.” And so I used to be like, okay, they actually gave me the boldness to … I used to be like, properly, let me simply see what occurs once I listing this on Craigslist. And somebody messaged me the following day and I bought it for 400 bucks. And I used to be like, what? I could make $400 doing this.

Ashley:
Yeah.

Rob:
And so I turned my basement into mainly a furnishings wooden store for the higher a part of a yr and a half, possibly two years. Each night time after work, I’d get house at 5 or 6, I’d eat dinner with my spouse, and I might go downstairs from seven to at least one, and I used to be simply making furnishings and I used to be promoting it on Etsy and making an additional, it wasn’t lots, nevertheless it was 800 bucks a month.
And so it wasn’t actually a home hack as a result of I used to be renting out the room, however in a way, I used to be attempting to determine how else I might make revenue with this property on this basement that was utterly empty. It was a thousand sq. ft, the identical measurement of my home. This was it. And so I used to be making one other 800 bucks right here, and by this level, I’m mainly breaking even on my mortgage. I obtained 1,200 coming in, payments and bills and all the things like that. And so this created this habit for me the place I used to be like, okay, no mortgage means I can let it experience just a little bit and hold pushing that cash into the following mission.

Ashley:
So is that the way you funded your workshop there? Did you are taking the cash you have been saving from not paying the additional $400 to your mortgage, and have been you placing that to construct out this workshop or was there not likely loads of expense to beginning this furnishings enterprise?

Rob:
No. I did how each woodworker did the place we’re simply doing loads of actually arduous guide work that’d be lots simpler with an $80 software factor. And so anytime I had a brand new mission, I’d be like, all proper, I’m going to purchase a planer or I’m going to purchase a joiner. I’m going to purchase this or that. And so this all finally culminates as a result of we love our home. Lastly, I don’t need to say we’re feeling snug as a result of as a lot as I need to glorify this a part of my story, we have been nonetheless dwelling what I thought-about to be paycheck to paycheck. I believe in spite of everything of our bills … Proper earlier than this, we had lower than a thousand {dollars} each month to our title after our mortgage, pupil loans, which have been a thousand bucks a month. After which, what was it? Oh, bank cards. I believe we have been 15, $20,000 in bank card debt.
So sure, all of this was nice and it was paying my mortgage, however that is the place the habit is available in as a result of I’m like, oh, this novel idea of working arduous outdoors of your 9 to 5 and making more cash to repay your liabilities, that’s what was actually firing off in my thoughts. And so I used to be simply attempting to all the time discover little issues right here and there to determine, issues that I might do to make an additional 100 or 200 bucks. And in order that was my model or my character in my early company life.

Ashley:
Did you have already got that concept whenever you began the furnishings enterprise that that is one thing brief time period, you don’t need to have workshop endlessly in your basement? Or have been you simply pondering day-to-day like, that is superior, that is nice, with no exit technique of, okay, I have to get extra passive investments or extra actual property in order that I don’t need to have this workshop in my basement? What was your mindset early on doing that enterprise?

Rob:
Yeah. So it was like a, hey, that is nice. I find it irresistible. I like making a living. And I believe I simply realized that it was tough for me to scale that enterprise and have a 9 to 5 job as a result of it was taking me actually, there have been nights, there have been respectable nights the place I might get performed making my furnishings after which I might come upstairs and my spouse was preparing for work as a result of she awakened at 5 or 6, and he or she’s like, “You’re barely going to mattress.” I’m like, “Yeah, I couldn’t determine tips on how to make this desk or no matter.”
So no, I didn’t essentially have this long-term enterprise for it. I believe what occurred in the direction of the top as I used to be getting burnout as anybody would, my spouse and I simply felt like Kansas Metropolis was actually nice for us. We had no thought it was going to be this superb metropolis, however we have been like, “Let’s do one thing else. Let’s go on to regardless of the subsequent factor is.” And we have been nonetheless actually broke. We have been making it work. Home poor is actually one of the simplest ways to place it. However I do bear in mind we have been like, “Properly, what ought to we do?” And we’re like, “All proper, let’s map it out. We’re actually broke. We don’t have some huge cash. How about we transfer to LA?” And we have been like, “Yeah, that appears like a fantastic thought.” And that’s precisely what we did. We moved to LA after three or 4 years of dwelling in Kansas Metropolis.

Ashley:
And did you purchase a property there or did you lease it?

Rob:
Properly, initially, we rented. I went again into the identical entice of like, okay, I purchased this … I rented this 660 sq. foot condo. It was a one bed room, one tub. It was my spouse and I, and it was method smaller than the home that we had bought as a result of in my home, I had an 1,100 sq. foot home, a thousand sq. foot basement, and I’m paying $1,800, 1849 as a result of they have been charging me pet lease on this condo for six months. And it simply actually made me sick to my abdomen. One thing didn’t really feel proper that I felt like I had regressed. And granted, we weren’t struggling fairly as a lot at this level as a result of we had gotten actually huge important raises at our job, every of us, and so we have been really doing okay for the primary time, nevertheless it simply felt bizarre paying $1,800 to somebody and by no means getting hit again.
And so about six months in, I’m identical to, “You recognize what? Let’s purchase a home.” And my spouse was like, “We will’t afford that.” And I used to be like, “We positively can’t.” However right here’s what occurred. We bought our home in Kansas Metropolis for $215,000, and that was loopy for us as a result of we listed it for 195. Keep in mind, we purchased it for 159. We listed it for 195. We obtained three gives the primary day, and one in every of them was $215,000. And sadly, it didn’t appraise. I believe, I don’t know, we ended up assembly within the center at 208. However in spite of everything of our closing charges, our commissions, all that stuff, we had a revenue of $40,000 from that home and we owned it for 2 years.
And so I believe that not solely was that groundbreaking as a result of it was probably the most cash I had ever had in my life in my checking account, my spouse and I. But it surely was like, oh, wow, this all occurred as a result of I invested $5,000 or 6,000, no matter three and a half % is of 159,000. We purchased a home with that. And granted that we simply occurred to be in Kansas Metropolis at a time the place it was exploding, however we made $40,000 from this home in two years. That was my wage. That was a life-changing amount of cash.
However whereas we have been shifting to LA, my spouse was like, “Properly, hey babe, you’ve obtained $40,000 in pupil mortgage debt. Do you need to simply pay it off?” And I used to be like, “No, I don’t suppose so.” And he or she was like, “Why? You’re all the time complaining about we will’t afford the thousand greenback cost and this and that and in the event you do that” … And I used to be like, “I do know, I do know, however I simply really feel like there’s one thing we will do with this $40,000 that isn’t paying off my pupil loans. And I do know it’s loopy, however I believe we obtained to sit down on this cash. I believe we simply need to determine one thing else out with it.” And he or she’s like, “All proper, in the event you really feel that method.” I used to be like, “I do. I actually do.”
And so we lease this condo and we’re dwelling there for six months, and the $40,000 is simply decaying in our checking account, paying this mortgage. And in order that’s the place I had this concept. I used to be like, “Let’s purchase this home.” My spouse is like, “I don’t know if we will afford it.” I used to be like, “I don’t both, however we do have sufficient for a 3 and a half % down cost with an FHA mortgage.” And I used to be like, “I believe we should always strive it.”
And so similar kind of factor. We begin the home hunt and all the things in LA, by the way in which, is a really costly marketplace for anybody that doesn’t know. And our funds was 450,000, which was very laughable even for that point. So we struck out, struck out, struck out, actually simply heartbroken. And I believe early on, I simply realized the primary lesson you need to ever study in actual property is to by no means get married to your home, by no means get excited, by no means get your hopes up till you might be on the closing desk and also you shut on that home as a result of so many issues can occur earlier than then. And so we saved falling in love with these homes and we saved dropping them, and we tried writing the letter, we did all the things, and we simply misplaced over and time and again. And I believe we gave up, we did.
And we’re dwelling in our condo, no matter, we have now six months left on our lease. After which guess what? Identical precise factor. Every week later, our realtor calls us and is like, “Hey, I’ve obtained this off market property.” And I used to be like, “Okay, inform me extra.” And he or she’s like, “And it’s obtained a basement beneath and you may lease the basement.” And I used to be like, “Oh my, gosh. We did it. That’s completely what we’d like.” As a result of once I was trying in LA, I used to be in search of one thing that I might home hack with. I had realized this precept early on and I used to be like, all proper, if I’m going to pay a $4,000 mortgage, I’ve to earn a living another method or else I’m going to be paying a ton of cash in mortgage each month.
And so the realtor calls, she’s like, “I’ve obtained this home with not even a … it’s like a bonus area, 279 sq. ft.” And I bear in mind strolling in and being like, all proper, wants loads of work, nevertheless it was precisely what we would have liked, and it was $624,000, which was embarrassing on the time as a result of after we closed on this home, I couldn’t … Look. I used to be scared to inform my household. I used to be scared to inform my associates. I used to be scared to inform my coworkers how a lot this home prices as a result of I knew that they’d suppose both, wow, he should make some huge cash if he can afford that, or he’s an fool for spending that a lot cash on a home. And actually, that was most likely the case. It was so silly for me to do this.
However I simply knew that, once more, if I might simply determine how another person might pay my mortgage, it labored for me as soon as. I purchased this home in Kansas Metropolis. I made $40,000 on it. And I used to be like, if I simply hold doing that, finally I’ll have some huge cash, I believe. And so we purchase this home, and I had calculated that if I rented that little 279 sq. foot studio on Airbnb, on this loopy platform the place folks pay you each night time to sleep in your home, I bear in mind pondering, if I might try this, I believe I might make 50 to 75% of my mortgage. And in order that was laying the guts on the desk to my spouse. I used to be like, “I believe we will do that. Consider in me such as you all the time have. And in the event you do, we’re going to make it work.” And that’s what we did. We purchased the home.

Tony:
A few issues I need to level out that you just talked about. First, you talked just a little bit about, hey, you had this lump of money that you might have used to repay your pupil mortgage debt. Simply off the highest of your head, ballpark, what was the rate of interest in your pupil mortgage debt?

Rob:
So loads of them have been authorities backed so I had curiosity that was wherever from two and a half to 3 and a half % principally.

Tony:
Tremendous low curiosity debt. Proper?

Rob:
Yeah.

Tony:
And dude, I used to be really simply studying an article this morning about Jay-Z and Beyonce. They’re billionaires, and so they purchased this $88 million mansion in Bel Air someplace. And a billionaire, Jay-Z and Beyonce might most likely have the money to simply purchase that outright, however they even obtained a mortgage after they purchased that property. They put down 35 million, however they nonetheless had a mortgage for, what’s that, $53 million. And in the event you see Jay Z and Beyonce leveraging debt in a sensible method, it’s as a result of they know even at a 6% rate of interest, in the event that they obtained 53 million in money with their title, with their companies, they might exit and 10X that cash in the event that they needed to.

Rob:
Yeah.

Tony:
So for the rookies which might be listening, I believe there’s one thing to think about as properly the place you need do the maths and perceive, okay, if I’ve obtained pupil mortgage debt at 2%, however I can go and make investments this into actual property and get 10% or 12% or 15% or 20%, which one makes extra sense for me financially long run? It does take just a little little bit of braveness, which I believe Rob is one thing you’ve proven that you’ve, however for lots of people, it’s the proper selection financially.
That takes to my subsequent level that you just’ve performed a extremely good job all through this story, Rob, of taking considerably calculated dangers. The primary funding, it was, hey, we’re paying $800 in lease. Can we stretch it to get to a thousand {dollars} in our mortgage? Okay, then how can we subsidize that? Then you definitely get this proof of idea in a cheaper market in Kansas Metropolis, and also you say, okay, how can we now replicate this in a costlier market like Los Angeles? So that you didn’t leap off the deep finish and go from, hey, I’m renting an $800 condo in Kansas Metropolis to I’m shopping for a $600,000 home in LA. There have been steps in between.
So I believe for our rookies, as you’re listening to Rob’s story, the issues which might be essential so that you can take away are what are the child steps you can begin taking in the identical method that Rob did to start out proving out that idea to just be sure you’re not overextending your self?
After which the very last thing, Rob, and that is the place I need your enter, you’ve stated the identical phrase a few instances now, however you stated that you just pitched to your spouse. I believe I’ve heard you say it two or thrice now. And I believe for lots of our rookies, that’s the problem that they’ve is how do I get my partner on board with these loopy concepts that I’ve? So from you, Rob, and your expertise, why do you suppose you have been in a position to get your spouse to be supportive of those huge steps that you just needed to take because it got here to actual property investing?

Rob:
To begin with, I used to be in promoting, so all the things I did was a pitch in life, at work and all the things like that. However actually, I believe you’re so proper in that these are all calculated dangers. And all the things relies on expertise. It’s by no means like I simply went and did one thing, aside from shopping for the primary home with no expertise, all the things was all the time leveling up accordingly. There was one management variable in each single threat or each single experiment that I ever took. And that management variable was me. I knew what I might do. I knew that once I need one thing, I’ll make it occur. And I believed in myself each step of the way in which.
And I believe if I had most likely approached that dialog with my spouse like, hey, I don’t suppose I’m good at this, however I’m going to do it.” She most likely would have been like, “Properly, let’s take a breather, champ.” However I believe her simply seeing how severe I used to be, it wasn’t like I used to be ever like, hey, yeah, I don’t know. Let’s simply do that. It was all the time like, hey, let’s do that as a result of I genuinely imagine it’s going to alter our life. I believe it was simply arduous for her to see some other different as a result of she was so bought in as properly like, okay, hey, you’ve performed proper by me alongside the way in which, and also you’re going to proceed to do this, and so let’s do that factor.
She was all the time the person who was … I all the time say this. I’m an astronaut outdoors of the Area Station floating round in area, and Ash was my tether. She retains me connected to the ship so I don’t float away in area. So I all the time had little issues or no matter, and once I wasn’t tremendous assured in these issues, she’d be like, “I believe you don’t even imagine this.” I’m like, “Yeah, you’re proper.” However for the stuff that I’m for actual on, she was all the time on board one hundred percent.

Tony:
Robin, I believe that’s such an essential distinction as a result of once more, we get requested this query usually from rookies which might be followers of the podcast which might be doing all the things, and so they’re like, “Hey, how can I get my partner on board?” And loads of it comes right down to you asking your self, have I actually earned my companion’s belief and respect to get on with this concept of actual property investing?

Rob:
Completely.

Tony:
Ash and I had a dialog, your spouse and I had a dialog, I believe it was at your occasion or one of many instances that I noticed her in particular person., and we have been speaking about beginning this little health competitors with one another. I used to be laughing. I used to be like, “Oh, no matter. I’m going to beat Rob at this, that and the opposite.” And he or she says one thing to me that caught out to me, and he or she checked out me, she’s like, “I don’t know, Tony. When Rob actually places his thoughts to one thing, I don’t suppose anybody can actually beat him.” And that’s one thing that you just’ve proven and confirmed all through your whole relationship to your spouse for her to have that belief and religion and confidence in you.
So for all of our rookies which might be listening, in case your partner isn’t on board, I believe one of many issues that you must do is look within the mirror and say, okay, why haven’t I earned that help from my partner?

Rob:
Yeah. Wow, that’s very nice of her. That’s the nicest factor she’s ever stated. No, I’m simply kidding. I’m going to take her out tonight. Truthfully, it’s so touching that-

Ashley:
It’s, actually.

Rob:
… she says so good issues about me behind my again. Isn’t that the way it needs to be, by the way in which? Oh, man. Thanks for sharing.

Tony:
No, after all, man. Properly, let’s hold the story going, brother. So you bought the home hack in KC. You bought the home hack in LA. You’re shopping for this home, however you even have the condo. So are you simply breaking your lease or what are you doing with the condo whenever you transfer into the home?

Rob:
Proper, proper, proper. Okay. In order that was that huge dialog that I had together with her. I used to be like, “Let’s purchase this home.” And he or she’s like, “What in regards to the condo? It’s like 1,800 bucks. We’ve six months left on the lease.” And I used to be like, “All proper, sure, I hear that and permit me to rebuttal.” There may be this web site, it’s referred to as Airbnb, and in the event you put your condo on it, folks pays you 100 bucks an evening. And so this was all of the wild west. We had no thought what Airbnb was, if it was going to work. And he or she was like, “Properly, do you suppose it’ll work?” And I used to be like, “We rented our home long run for 400 bucks in Kansas Metropolis, and LA is definitely 4 instances costlier. So in principle, I ought to be capable of make much more.”
And so we purchase this home with the intention of Airbnbing the little studio condo that I instructed you about. And so I used to be confronted with this resolution. I used to be like, all proper, properly, I’ve to both break my lease and pay 8,000 bucks or I might sublease it and simply break even. However I used to be so on this idea of, okay, what if I listed on Airbnb and I might make a delta, the in-between? If I’ve this lease at 1,800 bucks, if I’m charging 100 {dollars} an evening, 18 nights later, I’m breaking even. So if I can ebook it for 20 nights or 24 nights, I’ll make all that juice afterwards. And so truthfully, it was dangerous. I didn’t know something about Airbnb, however I used to be like, properly, the choice is I let the lease run out and I simply pay 1,800 bucks each month. So I ended up itemizing that condo on Airbnb. Once more, this was seven years in the past.

Ashley:
So was there no rule in your lease settlement that you just couldn’t try this then?

Rob:
There most likely was. I don’t know. I do bear in mind going to the leasing agent and being like, “Hey, yeah, so Airbnb, do folks try this right here? Do you all care?” And he or she was like, “Yeah, typically they don’t actually.” And I used to be like, nice, adequate for me. And I ran off. And I bear in mind pondering now on reflection, it’s very humorous to me as a result of that property, that leasing agent positively making, I don’t know, 10, 12 bucks an hour, doesn’t really care in regards to the administration of the place. She’s simply clocking in and creating leases and stuff.
And in addition, she most likely didn’t actually even know, this was 2017, and I didn’t both. I didn’t notice, oh, that could be a legal responsibility for flats or something like that. So in my thoughts, I felt like, yeah, hey, so that you don’t care. They usually’re like, no, not likely. And I used to be like, all proper, sounds good.
That was the primary one I ever did. However after that lease ran out, we moved on to truly … I believe I found out fairly shortly that if I need to scale and do that, I obtained to personal the true property. And in order that ended up being very true all through the remainder of my profession. However I used to be in a position to mainly earn a living from that first condo. And it did, once more, set off this spark in my thoughts of like, oh my gosh, I might use different folks’s property and listing that and earn a living off of that. After which on prime of that, I’ve obtained this home in LA that I purchased. My mortgage was $4,400. And the catch was that it was an entire fixer-upper and I needed to renovate that studio.
And for lots of people at house, you might not know this, however whenever you purchase a mortgage or whenever you purchase a home, you don’t actually get your first mortgage for a month to 2 months. It takes some time for it to course of and for that first one to hit.

Ashley:
Like your first cost due.

Rob:
Your first cost, precisely. And so I had closed, we had calculated it with the mortgage dealer on the precise day that will mainly give us 50 to 60 days to do it. And so I knew. I purchase this home, and it’s a ticking time bomb earlier than that first $4,400 mortgage goes to hit. And I used to be like, I have to utterly rework this 279 sq. foot studio earlier than I can listing it on Airbnb, and I don’t have loads of time to do it. And so I’m going in and I’m like, I don’t actually know a lot. I had began performing some DIY kind of stuff in Kansas Metropolis. I had constructed furnishings, and so I felt like I might do it. I used to be like, I believe I can graduate onto transforming just a little studio.
And so each night time after work, and my job was an hour away from my home, it was solely three miles away as a result of it’s freaking LA. However I’d get house at 7:00, 7:30, go get my spouse a kiss, possibly just a little hug, after which run over to Dwelling Depot, purchase no matter drywall or no matter I wanted. I might get a Pink Bull and I might get bitter cream and cheddar Ruffles, and I might go down into that studio till 4:00 or 5:00 within the morning each single night time for 2 months. And I demoed it. I took all the bottom out, and I had gotten all of it just about gutted to the place it wanted to be.
And I bear in mind pondering, all proper, now I simply need to tile this unhealthy boy and I’m good to go. And so I purchase this tile that’s three hours away nevertheless it was a superb deal, and I drive to Lancaster, California or one thing. I don’t bear in mind. It was two hours away. And I get all this tile. I load it up behind my automobile. I drive house and I’m like, all proper, time to tile this lower than 300 sq. foot studio. And I began tiling it, and my spouse is like, once more, it’s morning, and he or she comes down and he or she’s like, “That is all you’ve tiled?” I used to be like, “What do you imply? That is artwork, babe.” I had solely tiled 4 by 4. I had no thought tips on how to do something. And I had solely tiled 16 sq. ft and my again damage. And I used to be like, oh my gosh, I did fail at this. I assumed I might do something, however I did fail at this.

Ashley:
How did you even know what to do although and the place to start out? Did you YouTube it or how do you know what supplies to purchase?

Rob:
I did. I did. I YouTubed it, and all of the YouTube movies, these freaking YouTubers, they all the time make it appear lots simpler after which the man is like, “All it’s important to do is again butter and then you definitely again butter right here and also you place it down.” I used to be like, oh, I might try this. This outdated home. Thanks. I attempted it, however no, it’s not. Tiling is … I’ve the utmost respect for each tilers and their backs as a result of that was a really tough factor. So I knew early on, okay, hey, name it in whenever you … Fold when you recognize you’ll be able to’t play the hand. And I used to be like, I’m not going to learn to tile. That’s not my reward. That’s not my expertise. And so I ended up hiring that out.
The man involves my home, actually laughs on the job. He goes, “That is it?” I used to be like, “Yeah.” He’s like, “This took you eight hours?” And I used to be like, “Sure.” And he was actually simply very insulting, however he was additionally 500 bucks. And I bear in mind being like, “500? Are you kidding me? Increase, let’s do it.” I don’t have it, nevertheless it’s so value it for me.

Tony:
That was good of him to nonetheless provide you with sincere pricing as a result of for lots of tilers, in the event that they got here in and noticed that you just did that little sq. for eight hours, they’d been like, “Hey, possibly 3,000 bucks to tile the remainder of them. Yeah, that’s a fantastic deal really.”

Rob:
And at that second, I most likely would have performed it. He does it and he does it in lower than eight hours. It was loopy how briskly he did it.
It is a enjoyable little story about this complete factor, just a little enjoyable undeniable fact that I really simply realized after we have been planning this out. The very first YouTube video that I had ever needed to make was of this studio. And I really set a digital camera up and documented the entire course of from begin to end. And I bear in mind taking a look at that footage and saying, “That is absolute rubbish.” And I closed my laptop and I put that footage out. I believe I deleted it. And I used to be so hung up on having an ideal product that I by no means went on to truly edit it or submit it to YouTube. And the explanation I inform that story is as a result of I’m a YouTuber now, the Robuilt channel. And the very first video I made for that basically wasn’t that a lot better than that first one I had ever made. However the distinction is there was a seven-year delay in between each of these, between my first YouTube video now and the one which I by no means revealed.
And so I all the time like to inform folks, in the event you’re focused on documenting your journey, there are such a lot of advantages to doing that. There are such a lot of advantages. You get folks to know you and perceive you and belief you, folks in your sphere who would possibly need to make investments with you. And I misplaced out on seven years of these relationships as a result of I used to be so scared to place myself on the market with an imperfect product. And had I performed it earlier, who is aware of? Possibly the Robuilt channel would’ve existed seven years earlier and my life could be much more completely different than it’s now. I don’t remorse it. I’m proud of the place issues are, nevertheless it’s simply humorous to me that me, of all folks, was so fearful of posting my first YouTube video.
And so just a bit encouragement for these of you which have created that Instagram account or no matter, doc the journey, don’t be afraid to fail. I wasn’t afraid to fail on the DIY facet. I used to be afraid to fail on the content material facet, however do it. Put your self on the market as a result of it opens some fairly loopy doorways.

Ashley:
And there’s someone that’s going to take worth from it, somebody that’s going to understand what you’re sharing alongside your journey too.

Rob:
Yeah.

Tony:
Rob, so simply to complete issues off, so that you get this little studio tiled. I’m assuming you then launched that property onto Airbnb as properly. So that you get the condo unit that you just’re arbitraging mainly. You get your basement unit that you just’re renting out on Airbnb as properly. I suppose the query is, can you cowl your mortgage, this new $4,400 mortgage with the revenue coming in from these two items?

Rob:
Oh yeah, child. Are you kidding me? It was nice. Man, I used to be dwelling the life at that second as a result of not so … In Kansas Metropolis, I used to be saving the thousand {dollars}. My reference level in LA was my $1,800 mortgage or $1,800 lease in that condo. So then shopping for the home is a $4,400 mortgage. Yeah. So studio finally ends up completely panning out. Actually, I’m hanging up curtains and screwing the ultimate screw into the wall. Airbnb visitor knocks on the door and checks in and so they’re like, “Oh, hey.” I’m like, “Oh, I’m so sorry. That is my first time doing this. I’m simply getting prepare, blah, blah, blah.”
And in order that finally ends up, yeah, mainly ended up making two to $3,000 a month on that studio. After which the condo that I used to be arbitraging was making one to $2,000 revenue. And so mainly on an ideal month, I used to be making more cash than my mortgage. And that was like, oh, I figured it out once more. And it’s addicting as a result of when you’ll be able to end that, determine that puzzle, you simply need to hold going to the following hardest puzzle.

Tony:
And Rob, I like that you just ended on that, man, as a result of that’s precisely what you’ve been doing. I discussed this earlier, nevertheless it’s such as you take a look at an thought, then you definitely broaden it, you take a look at an thought, then you definitely broaden it. Since you had the KC property, you home hacked, then you definitely went to LA, you home hacked once more however this time with Airbnb, then you definitely did the rental arbitrage. We didn’t actually get into this, however you additionally constructed the tiny house in your yard in LA, nevertheless it was a paired down model and then you definitely rebuilt that very same tiny house in Joshua Tree however a a lot greater, nicer model.
In order that’s simply been what you’ve performed persistently all through your profession, Rob, is you take a look at one thing smaller, then you perform a little bit greater, then you definitely go just a little bit greater, then you definitely go just a little bit greater. And I believe that, if something, is the massive takeaway from our rookies which might be listening at the moment, man. However dude, thanks for sharing your story, man. We by no means actually get to dive in like that.

Rob:
Yeah, yeah. Properly, let me simply say one closing factor to cap off that LA property. I stated that Kansas Metropolis home, I purchased it for 159, I bought it for 215 and that was a $40,000 revenue that I had sitting in my checking account. I used to be 10 instances extra petrified to purchase that LA property once I purchased it for 624. That home at the moment is value between 1.2 and $1.3 million.
And I need to finish on this as a result of it’s loopy to suppose that I put $18,500 as a down cost. I had a bunch of vendor credit and stuff, however I put down 18,500 bucks. And if I misplaced all the things tomorrow, I might promote that home and have half one million {dollars} in my checking account as a result of I believed in myself, as a result of I knew that actual property might unlock the alternatives for me that my dad and mom all the time needed me to have. And it’s actually cool that that home was actually the start of what would finally turn into my actual property empire. It actually was. Clearly, the Kansas Metropolis home was first, however the classes I realized in that LA home have been those that formed me into who I’m at the moment. And all of it got here right down to me believing in myself, my spouse believing in me, and everybody else that believed in me alongside the way in which. So tremendous joyful and grateful to be right here and thanks for letting me inform my story.

Tony:
Yeah, that’s superb, Rob.

Ashley:
What a strategy to finish the present. That was nice.

Tony:
I can let you know’ve performed this speaking in entrance of the microphone one or two instances earlier than, man.

Rob:
I’ve had in a pod a time or two, however I’ve by no means actually instructed this story, actually not like this.

Ashley:
Proper. Yeah.

Rob:
And it’s actually cool to return and speak about it and it’s very nice to go and deal with the small print of the times once I was a no person with nothing. It’s probably the most particular time in my life when individuals are struggling, when individuals are like, “I’m unfold skinny. That is so arduous.” I’m so jealous of what you’re going by means of since you solely get to undergo that one time, and I miss these years a lot. So take pleasure in it. Benefit from the course of, peeps.

Ashley:
Yeah. Benefit from the journey.

Tony:
Rob, I need to take us to our rookie examination earlier than we allow you to get out of right here, man. So these are the three most essential questions you’ll ever be requested in your whole life, man, so are you prepared for the primary query?

Rob:
Certain, let’s do it.

Tony:
All proper. Query primary. What’s one actionable factor rookies ought to do after listening to your episode?

Rob:
Go get pre-approved for no matter home that you just’re desirous about doing as a result of that’s the very first thing that can let you know what you’ll be able to and may’t purchase. Everyone is like, oh, the place am I going to purchase a home? What market? What this blah, blah, blah? Learn the way a lot you’ll be able to afford first. Get accredited with a mortgage particular person. That can set the final word guardrails on how one can make the next move.

Ashley:
Rob, what’s one software, app or system you employ in your small business at the moment?

Rob:
The best software I’ve is my digital camera. The very best digital camera available on the market is the one that you’ve in your pocket. And the toughest half about making content material is hitting report, so by no means be scared to simply flip in your digital camera and doc no matter home flip, home hack, new development that you just’re in.

Tony:
I like that reply, Rob. Ash and I speak about this on a regular basis, in regards to the energy of documenting your journey. I believe all of our lives has actually been impacted by content material and us sharing what’s happening in our lives. I might not be in entrance of this microphone proper now speaking to any of you had I not began my very own podcast earlier than. That’s how I got here to the BiggerPockets ecosystem. Rob began his YouTube channel. Ashley was on social media and had a good following there. All of us had a way that content material performed a task in our capability to develop our companies. So for all of our rookies which might be following, don’t suppose that it’s important to wait till you’re this massively profitable particular person. Simply seize that digital camera and doc the journey that you just’re happening.
All proper, Ro, final query for the examination. The place does Robert Abasolo plan on being 5 years from now?

Rob:
Oh, that’s how I do know you actually know me since you referred to as me Robert. 5 years from now, I believe I’d prefer to be at 500 items. I’m at the moment engaged on a bunch of developments, glamp websites, distinctive tiny house stays, and I need to get to 100 by the top of this yr. And I suppose if we simply carry that math on, 500 of the good items on the face of the planet, that’s the place I need to be.

Ashley:
Okay. Properly, Rob, thanks a lot for becoming a member of us at the moment, and please inform everybody the place they’ll attain out to you. And also you even have an enormous occasion arising, too, that I’ve seen and heard throughout about.

Rob:
I’m so excited. Okay. Yeah. So you will discover me over on YouTube or Instagram or Threads in the event you’re actually in on the know at Robuilt, R-O-B-U-I-L-T, or you might discover me at my convention, Host Con. It’s taking place in Houston, Texas in October twenty eighth by means of the thirtieth. It’ll be an ideal closing leg to the BiggerPockets Convention. It’s proper after that. Come to each. Come hang around with me. You could find out extra over at hostcon.com. And clearly, one of the best place to seek out me is thrice every week over on the BiggerPockets Actual Property podcast present the place you’ll be able to find out about actual property, entrepreneurship, scaling and all the things in between.

Ashley:
Sure, we love that present. And Rob, thanks a lot for becoming a member of us. We actually recognize it. It’s positively an honor to have you ever on the Rookie podcast and to share your childhood journey and your very beginnings as home hacking. Thanks a lot.

Rob:
Thanks. Thanks.

Ashley:
I’m Ashley at Wealth from Leases, and he’s Tony, @tonyjrobinson on Instagram, and we can be again on Saturday with the Rookie Reply.