ITF 19 | House Hacking


Age does not define success. And it certainly didn’t stop Gerardo Hernandez from getting into the business at the age of 20 (!) with the help of a mentor and very supportive parents. He also proved that not all entrepreneurs started knowledgeable about the strategies and the secrets of the industry before investing.

Gerardo is an entrepreneur who started young in the real estate investing business through his mentor. He is independent and started working as a national guard to pay for his college tuition and got interested in investing until he got lucky by meeting his real estate mentor. Gerardo has a mindset of a successful person. He grabbed every opportunity that came to him, leaned into it, got backed by someone genuine, and researched to learn more about real estate — an unconventional way of doing real estate by buying properties before learning how to do it. He invested, made mistakes, learned more about real estate investing, and corrected his mistakes to be more successful in it. His luck and hard work made him hit financial independence.

In this episode, Gerardo will share his story on how he attained financial independence. Listen and enjoy the show!

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Success Out The Gate And How He Finally Got Around To House Hacking With Gerardo Hernandez

Z, how are you doing?

I’m doing great.

Tell us what’s going on in your life.

I’ve got this house for sale, and it has been a quick close because I’m selling to an investor. I found out they are not buying all the furniture because it was an Airbnb and a furnished rental, so it’s Murphy’s Law. I will be in Hawaii when it’s closing, and there’s no way for me to get to St. Louis to empty the house. I’m already hatching a plan with my other three tenants to have them go scout out furniture, hire movers, and make the whole thing happen. It’s intense.

It’s an Airbnb that you have?

It used to be a BNB, and the city has gotten a little less friendly, so I have decided, “I’ve got these for more than five years. They have doubled in value. Time to sell.”

Congrats on almost selling.

Thank you. I hope it will happen.

One thing that happened for us was one of our buyers got cold feet on a duplex in a nice area. Honestly, the seller had given them everything they could have asked for and more, and they didn’t want to go through with it. Unfortunately, they lost their earnest money, which I ended up refunding them for because I’m too nice of a guy sometimes but we took the deal from them. We are under contract for a duplex over by Sloan’s Lake, and I’m pretty excited about it and that thing up and running.

Congrats on finding somebody. I know you were sending it out to the crew to see if we could bat signal and see if anybody can find somebody in five minutes.

I was trying to wholesale it quickly but I was like, “It’s too much work. I will take it.” It feels good to have that. Enough about us. We’ve got a cool guest, Gerardo Hernandez. It’s funny, he did things totally backward and somehow made it work. I absolutely love that. He just leaned in.

I love how he was entrepreneurial from the get-go because you can see that in people early on in their lives. I used to sell candy at school and do all kinds of random stuff. He talks about that. He set himself up and, with a little bit of luck, went a long way.

He definitely got a little bit lucky but that’s part of the game. You start investing. You have to invest to get lucky. You can’t get lucky sitting on the sidelines. I admire his bravery in leaning in and taking action. It’s paying off for him. He has that mindset of a successful person. He understands delayed gratification. He understands living below your means. He’s got the fundamentals. Once you have those fundamentals down, it’s hard not to succeed.

It seems he’s doing it, so I’m excited for him. It’s great to see young people killing it.

Enough of us telling his story. Let’s bring him on the show.

Gerardo, welcome to the show. How are you doing?

I’m doing good. Thank you. I’m so honored to be here.

If you bought a property but hated living alone, you can just get a renter to cover the mortgage.  Click To Tweet

It’s a pleasure to have you on. You reached out to me over Instagram. You have an interesting story, financial independence in a few houses. To couple that, you were in the military. We have a decent amount of military following, and we have had quite a few military guests as well, so it will be cool to see your story and your take on it. To get started, how did you hear about financial independence, and when was that?

When I first heard about financial independence, it was not too long ago. It was only probably in 2020. That’s when I fully dove deep into reading, podcasts, and stuff like that but overall, in general, I have always been an entrepreneur. I was born and raised in Denver, so I remember shoveling snow and cutting grass. My dad came home one day, and I gave him $100. We went 50/50.

We used to shovel snow. We upgraded to a snowblower, so it helped business a lot. That’s for sure. That’s one thing that I’m grateful for. My parents let me try everything. Before I was eighteen years old, I played the guitar professionally, probably for a week. To me, in my own mind, I thought I was a professional. I did everything and stuff like that. My parents let me try everything, which was great.

Fully, how I’ve got into real estate investing? My parents have always been saying that they are not going to pay for college. I had to find a way to pay for college, which is why I joined the National Guard. I’m not sure if you guys know what that is but basically, it’s something you go to. They call it a Weekend Soldier. You go two weeks out of the summer and one week in a month. I went. It was going to help me out with school. When I came back, Forex trading was heavy in Colorado, so I’ve got into that. I’m like, “This seems like a scam.”

Here, in Arizona, they have a thing called The Online Trading Academy. I learned how to do it professionally to see if it was truly a scam. It’s a waste of money, in my opinion but I tried it. I’ve got a job. A lot of people don’t know about it. It’s called AGR, so it’s active duty for those weekend soldiers. I never have to leave Arizona and get all the active benefits. I get the housing, the VA loan, and all that good stuff.

When I’ve got the job, my mom had called me and said, “Our landlord needs help with one of his houses. Can you stop by?” I went and stopped by, and he needed help with hanging a light bulb or something. He’s like, “What do you do?” He had seen me in my uniform and I was like, “I’ve got this job.” He says, “You should buy this house for me.” I’m like, “My parents buy houses, so let me buy them.” I bought the house from him. He gave me a huge discount because we didn’t have to hire a realtor. He cut off $20,000.

As I was helping him remodel, he told me, “What fans do you want? This is going to be your house anyway. I have to replace them.” He’s telling me little stuff like that. It was pretty cool. Six months later, he tells me, “I have another house for you to buy.” I’m like, “I can’t. They gave me this loan.” He says, “Bring me $5,000, and I will handle the rest.” I went, sold my car, got $5,000, and gave him $5,000.

We met with the title company, and he was my bank. He did that with my parents’ house too when we moved here. That’s when I learned a little bit more and started asking them questions. I asked him a question, “What do you do for a living?” He’s over 59 and he says, “I’m a landlord,” and I said, “Does that make good money?” He said, “About $25,000 a month for me.” He owns 25 houses free and clear here in Arizona. He’s now moving to Washington. He’s the guy that got me into this, and that’s when I started reading BiggerPockets’ Set for Life, Rich Dad Poor Dad, and that’s when I bought a condo in Scottsdale. I did a short-term rental there for a little bit, moved on, and bought my first house hack.

A lot to unpack there. That was a good little synopsis. When you first started, you started in the National Guard. It was your first big step. You describe how that’s almost a part-time military gig. Is their National Guard in Phoenix? I thought that was on the Coast for some reason.

You are thinking of a Coast Guard. The National Guard is for people that help out with state disasters. For anything state-related, the National Guard helps with. I never heard about it until I moved here to Arizona. Every state has a National Guard and a two-time staff.

You get the same military benefits from that.

You don’t get the full benefits as an active duty person, but I joined the National Guard to help me for school specifically. I was using it for TA Assistance and stuff like that.

Did you go to school?

Yes. I have 1 or 2 more classes and get my Associate’s degree but I haven’t been in for a few years, now that I discovered real estate, there’s no point in going to school. It’s a waste of time, in my opinion.

I totally agree with that. Your school now is the school of hard knocks of real estate investing.

I’ve got the best teacher.

You did the National Guard, you’ve got your qualifications to go to school for free or next to it, you did a little bit of schooling, and you found real estate investing and decided not to pursue the degree that you originally intended for. What happens? Run us through your first deal. This will be the for-real deal. Tell us more about that.

ITF 19 | House Hacking
House Hacking: If you don’t know how much to rent your place for, try to just put it up for whatever the mortgage is, plus the HOA fee, and see if you can get that.


I purchased this first property from my mentor. At the time, he was my parents’ landlord. He has a few houses here in Arizona. I was going there to help him repair some stuff, and he ended up selling it to me. The number’s there, I was able to get the property for $172,000, and it was valued at about $190,000. He cut the price down so that way I was saving him money in real estate fees.

That’s what he did for me. The mortgage came out, and it was $1,100. It’s pretty good. The interest rates were a little higher than they are now. That’s what the numbers were. I moved in there for two weeks, and I hated living alone. I went back and moved to my parents. I’ve got a renter in there to cover the mortgage.

How did you find it, though? What mortgage was that?

It was a normal conventional loan.

Was it 25% down?

No, it’s a 5% conventional loan, but since it was my first home, my lender found me all kinds of grants. I have never heard of that before. It covered my full 5% down payment. All I had to pay was the $500 appraisal fee.

Was this an owner-occupied loan?

It was.

How did you get away with moving out after a year?

My full-on intention was to move in. I’m in for everything. I moved in there, and two weeks later, I didn’t like it. I didn’t like living alone. I didn’t plan on it being a rental. I didn’t know anything about real estate investing yet. I was going to live there but then it was super lonely, so I’m like, “Mom, can I come back and live with you?” That’s the way it went.

What did you get that tenant paying for? Did they cover the mortgage or was it a little bit extra?

This was when I ended up asking my mentor, “How much do I rent this place for?” It was good advice coming from him. He said, “When I first purchased properties, I had to pay $100 or $200 to cover the mortgage. Put it up for whatever the mortgage is plus the HOA fee and see if you can get that,” and that’s exactly what I did. I’ve got it in two hours and put a sign up in front of the yard. I didn’t post it on Zillow or any pictures. I just put it up there. In two hours, a guy came by with his wife, and I rented it.

It sounds like it was undervalued then.

It sounds like you went a little cheap there.

Definitely, I did, for sure but it was a good learning experience. I was able to interact with tenants.

Lessons learned. I do want to take it back real quick. You close with an owner-occupied loan but you live there for a month. That is perfectly okay. You need to intend to live there for a year. If you decide to move out, you can’t move down the street or maybe even across town. There’s some mileage number like 30 miles or more away.

The fact that you moved from Arizona to Colorado would meet that qualification, so you are not committing mortgage fraud. It’s for readers to understand that and how that works. You’ve got a decent first deal but you didn’t have your own knowledge to get the most out of it because it sounds like you are renting it too low.

Never buy a house that you wouldn't live in yourself. Click To Tweet

I didn’t know what cashflow was. I was twenty years old when I bought that property.

You know you are not going to lose. Hold on to that thing. Let rents go up, and let the property get paid down, and you will be good. That was an almost single-family house, the first one. What happens with property number two?

For property number two, I didn’t ask him a lot of questions about the rental thing and that was it. Six months later, he called me, and this time, he doesn’t give me an option. He tells me, “I’ve got another house for you to buy. Come by and take a look at it.” I drove and took a look at it. It wasn’t remodeled like the other one. He said, “I will sell it to you for the same price. This one is worth a little bit more because it’s in a better area but I’m not remodeling anything for you.” I was like, “Okay. Cool, but I can’t get a loan.” That’s when he told me, “Bring me $5,000, and I will take care of the rest.” I was confused, to be honest.

That’s called seller financing for people who don’t know about it. What were the terms that you guys worked out? Did you work out an interest rate that was better or worse than what you are seeing normally in your conventional loan?

For my conventional loan, I’m refinancing it. It is 4.56% for my first one. I will give you the numbers. I bought it for the same price. It’s $170,000. The terms were interest only, and it was going to be whatever his HELOC interest rate was. It was 5%. He’s a super nice guy. He doesn’t make money off of this. He has already made all the money that he needs.

He’s a great guy. That’s the terms. For $170,000, I gave him $5,000, so I owed $165,000 on it. My payment was the same as the other one, $1,100. I did the same exact thing that I did the other one but this time, I took pictures and put them on Zillow. I’ve got the same amount of rent, $1,200, and covered everything. I didn’t have to pay a dime.

You are making $100 a month but you are not setting aside anything for CapEx or that stuff because, at this point, you don’t know. You are just going to cover your mortgage.

After I bought this property, this is when I started doing research and asking him tons of questions. He gave me this advice that I give everyone. He says, “Never buy a house that you wouldn’t live in yourself. Get a good house in a good area, and it attracts good tenants.” I recognize that because the second house that I purchased from him wasn’t remodeled inside, and it attracted not-as-great tenants as the first one. It was good advice. I’m not sure if you want to move on or keep talking about that one.

I’m blown away. I feel you are incredibly lucky because you did real estate backward. A lot of people study, analyze tons of deals and try to find something that might work. You stumbled upon this guy, and you trusted heartedly. He could have swindled you, and it sounds like you’ve got someone genuine that wanted to help someone young and scrappy. I applaud that. Sometimes, we put ourselves in positions where opportunities come to us. I’m curious, was there something in you that was already looking for an opportunity and invited this in?

I had always been an entrepreneur but when I’ve first got out of high school, that’s when I found out about the Forex thing. It didn’t go well. It’s like how Craig says that he was trying to create an app or create something new while my parents bought a house, and real estate has been around for a while. It clearly made this guy rich, so I’m like, “Let me not reinvent the wheel.”

What I have heard people call what you did is you leaned in. You had an opportunity, leaned in, and leaned in further and further. You are fortunate that someone was there to catch you and help you down nicely. That’s awesome. It’s good that you figured out after the second one that you should probably start doing some research, make this a business and do this methodically versus rolling the dice every deal that you do. What year are we now after your second one? You have bought two at this point.

We are in late 2018, early 2019.

Early 2019 is when you start getting serious about investing in real estate. You start listening to BiggerPockets, watching the webinars, listening to the podcast, all that good stuff. Where do you take it from here?

One, I remodeled that second place and raised the rents, so I could get better tenants. I raised the rent in the first one as well because their leases expired at this time. What I do is I need to get closer to work. Both of these houses are 60 miles away from my job. In traffic, it sometimes takes me two hours to get to work. This was my plan after studying everything.

I thought, “Which niche is going to fit me the best?” I figured, “Let me try every single one, and then I could pick one.” That’s when I discovered short-term rentals, so I’m like, “Let me buy a condo.” I bought a condo five minutes away from unworked in what’s called Old Town Scottsdale. I’m not sure if you heard of that but it has bars and restaurants. It’s a great area to be in.

It’s fancy but it was five minutes away from work, so that’s why I wanted it. I bought that place. Oddly enough, all the houses that I bought, besides this new one, have all been the same price. I purchased that place for $172,000. It was a normal conventional loan, and I had saved up some money. All-in, it was $10,000 for the down payment and all that good stuff. I only saved $2,000. My mom lent me $8,000.

Was that 5% down?

ITF 19 | House Hacking
House Hacking: If you don’t have a whole lot of money, but you want to just get into the game, buy a cheap condo, put that 5% down. Airbnb is during the weekends while you stay at your parent’s or friends’ house.


Yes, 5% down.

That’s the condo in Old Scottsdale. Are you planning on living there?

Yes. I remodeled the entire thing, and that’s when I started living there during the weekdays. I don’t have tons of friends here in Scottsdale, so I’m like, “Let me put it up on Airbnb on the weekends, and I will stay at my parents’ house on the weekends.” I house hack with my parents.

Your parents are in Arizona. They are no longer in Denver. That’s also a creative way to house hack. You are fortunate to pick up a few properties before that but if you don’t have a whole lot of money and you want to get into the game, maybe buy a cheaper condo. Buy a $120,000 condo, put that 5% down, you are talking $5,000 to $10,000. Go to your parent’s house or a friend’s house on the weekends. I bet you generate almost your mortgage payment on the weekends because that’s usually the higher rates anyway.

I generated more. My mortgage was only $1,000 on that place. On the weekends, I generated about $2,200.

Just for three nights?

I would rent it out for Friday, Saturday, Sunday, Monday. Those are the days.

That’s how I did it. In my early days, before everybody was talking about house hacking, I had a one-bedroom apartment, and I did everything I could to be out of there. I was staying with friends buying them breakfast, trading massage, I was in such therapists at the time. Sometimes it’s going camping, pet sit or whatever you’ve got to do and rent your place out. There are lots of ways to house hack, even if you only have a little bit of money to get started.

Get creative. That’s deal number three. We are at the end of 2020. Was that the condo with Airbnb you have been doing?

No. Let me finish off that timeline. I had that condo for eight months. It took a month to renovate. I Airbnb it on the weekends for maybe three months, and that’s when my realtor found me the short-term rental space to rent it out for 30 days or more. That’s when she found me a San Francisco Giants pitcher to rent the place for me, fully furnished $3,000 a month, and my mortgage was only $1,000.

You almost lived off of that.

Did you get that much because it was a San Francisco Giants player? Who was it again?

It was Sam Selman. I have his number still on my phone. When he was explaining to me, he was a triple-A guy who came out of the league and will start in the Big Leagues. Either way, it was going to be for $3,000 a month. I let my realtor price it for me.

No wonder why that $1,200 one got rented out in a second when it was worth close to $3,000.

No, this is a completely different area. For those areas, that’s the price, and this is Scottsdale.

It’s because it was a condo, it was so much cheaper. $1,100 was your mortgage. How much was the HOA?

My mortgage was $1,000, and the HOA started at $120. At the end of the eight months, it ended up going up to $220. That’s when I sold it.

In a VA loan, you can buy a two to four unit with zero money down. Click To Tweet

That’s not bad at all.

I would have kept that still, though. Cash cow.

Sometimes I think about it but I ended up flipping it to my friend that wanted to get into real estate investing. I did the same thing that my mentor did for him. We didn’t hire a realtor, and I cut $20,000 off the price. I gave him a smoking deal and made $30,000 off of it.

I’m curious, have you had any major blowups? It seems like some of these ones you started with little cushion because you only had $100 a month. I know that since then, you have raised the rent and done some renovations but have you had any horror stories with it or any big expenses that you didn’t expect?

No, honestly. I was fortunate enough that the first house that I bought was completely remodeled. The second one, after the lease ended, I did a full remodel. Me and my dad did all the work, so we saved a lot of money. When I bought the condo, we did a full remodel inside as well.

What are you spending on these remodels with you doing it yourselves bare bones?

I’m fortunate that my dad knows everything. He’s a handy guy, so I’m spending maybe $7,000 for a full remodel. We buy the floors, we lay the floor, we buy the cabinets, we put in new cabinets. The only thing I have to spend a lot of money on is granite, and that’s because we don’t do granite. We have a granite guy. That’s it.

You were bent for this.

I would be cautious, though. Don’t get too confident because when you start getting consecutive wins, you get overly confident, and then you get screwed.

Now, I have money in the bank so that way I don’t get screwed.

Have you got four properties now?

I will take you to where I am now. I flipped that condo, I made $30,000 off of it. I wanted to try one of everything so that one was a short-term rental, and now this is when everything switched. This is when I read Set for Life and House Hacking Strategy, your book, Craig. This is when I’m like, “This is one thing I haven’t done. I’ve got to do the house hacking method.” I took a real estate class. This is when I found out that with a VA loan, you can buy a 2 to 4 unit with 0 money down, so that’s what I did.

I was looking everywhere for one and couldn’t find one. It sucked. It’s out of my price range. I had my realtor change the criteria and find a house with the guest house. I closed on that, and it’s closer to work. Like Scott says, “If you can’t move, you have to move your work closer to your house or vice versa,” or whatever it is. I did that. I had a renter before I even closed.

What did you rent them out for?

For the numbers on that one, I bought it for $300,000. The mortgage is $1,500. My real estate agent has a best friend that does the Airbnb arbitrage, and since I bought it in a good up-and-coming area by restaurants and bars, she pays me $1,600 a month, and I pay utilities at a cap of $200. I live there for $100.

That is a hell of a deal.

I was trying to go for free but $100 will do.

ITF 19 | House Hacking
House Hacking: Save up enough cash so you can quit your job and go full-time on real estate. You can be either an agent or a lender, someone who can teach people the things you’re doing.


That’s basically free, especially because she’s managing everything. It’s easy money for you.

She’s technically a long-term tenant.

Break down the house setup because sometimes it’s cool for people to see different ways that you can house hack. Are you living in the carriage house or do you have somebody else in that? Is the main house 1 or 2 bedrooms?

I will break it down a little. The main house is a 2 bedroom, 2 bath, 750 square foot home. That’s where she will be doing the Airbnb thing. In the back is a 312 square foot studio that I live in. It’s crazy small but it’s me. It has a kitchen. I bought one of those Murphy beds. My parents and I are going to go set that up. That means that’s plenty of space for me.

That’s all you need. Do you have a girlfriend? Are you a single dude?

My mentor says, “Don’t have kids. That’s a big expense.” No girlfriend and no kids. When I read Set for Life and House Hacking Strategy, I had a nice Lexus, a two-door car but I’m like, “This is $600 a month.” I put it on Craigslist. I owe $25,000, and a guy gave me $24,800 for it. I sold it, and I bought a car using cash. No car paying either.

Now that we are talking about it, I raised refinancing in my first two homes. Those mortgages each are going to be $800, and they rent for $1,600 each. I learned how to do the rent. Those provide me with enough cashflow to live for free because they don’t have a house and car expenses. All my bills are under $1,000.

You are on the FI train.

What is your total cashflow if you break it down? It looks like you’ve got $1,600 between those two. I thought you had that other one still, but you don’t anymore. Basically, you are making $1,500 because you have to pay $100 a month.

For those two, my cashflow numbers now, I probably make around $1,200 after everything for reserves and all that stuff. With not having a car payment and a housing expense and keeping my expenses low, I save 75% of my income.

You are fast-tracking it, for sure. What would you say is your FI number? Have you thought about that? People in the FIRE community or FI community come up with, “I want X amount a month or I want so much that I have index funds or something.” Have you thought about what the future looks like for you?

I’m going to go the Craig route but I’m going to do it a little differently. Brandon Turner speaks about these different levels of financial independence. I have hit baby step number one. This is my plan. I’m saving up cash. I’m going to buy one more house hack, and I’m going to quit my job. I am going to be something full-time real estate, either an agent or a lender, something that I love to do and teach people the same things that I’m doing. That’s my goal. My number is only $5,000. I would be fine with $5,000 a month, fully passively. I’m sure once I get there, I will have a higher goal and a higher goal once you keep getting there but now, I’m fine with baby FI one and I will move to the next goal when I quit my job.

Once you hit baby FI, once you comfortably cover your expenses, and I say on almost every episode, that’s when you are playing to win versus playing not to lose. You are in the game now where you can go out and not make money for four months and still be fine, so you can cash out that big paycheck, start building a brand by being an agent and go sell houses for $8,000 to $10,000 per transaction. You become the expert in your field in house hacking or whatever it is, and people will start coming to you. I love that route. Maybe I’m biased but that’s the way that I went but it is the thing.

One thing that I learned from my mentor that I want to do is once I become a whatever in real estate, I’m going to launch my own podcast too and teach people things that they don’t learn in school. Nothing at all. Everything not learned in school, I’m going to teach on that podcast. The number one thing that I stick with that he gave me is delayed gratification. I had never heard of that term until him. Sadly, they don’t teach it in school.

It’s the opposite of what our society teaches us because it’s all about instant gratification, what you get on social media and how you can be entertained all the time. It’s a muscle but once you figure that out, it’s important.

His advice to me is, “Don’t buy too much now. Invest, so later you can buy whatever the fuck you want.” That’s what he said.

Dave Ramsey said, “Live like no one else now, so you can live no one else later or live now, daydream later.” We are heading towards the end of the show. Is there anything else you want to share with everybody before we get into The Final Four?

If you want to start in real estate, just start house hacking. Click To Tweet

I want to preach. There’s something that maybe I regret now. I know that my whole journey is pretty cool. I’ve got into it and was blessed enough to have met my mentor and hooking me up with these houses and stuff but for somebody that wants to do this, start house hacking. If I would have done this for my first one, I would have quit my job because I had been cashflowing $3,000 already.

That’s something that I preach about nowadays. If you want to start or even if you are already thinking about it or whatever it is, just house hack. You will thank yourself. I promise. It’s amazing. I want to do every single niche, and now I did house hacking, I found it. That’s the one I’m going to do. There are no questions asked.

One thing you are going to run into as you start gaining more capital is that you can only do one house hack a year. In your market, if you are buying a $300,000 house at 5% down, maybe you are paying $20,000 into a house hack, and that’s going to be your highest return on investment every single time. You are going to run into the issue where you have more than $20,000 to invest, and you are like, “Now what? Instead of a 100%-plus return on my money, I’ve got to go buy a traditional rental property and maybe get 10% to 12%.”

Is that why you switch to going down to North Carolina and stuff?

Yes, I still house hack in Denver every year. That’s the highest turn on money. I said, “I’ve got enough for another one, and I can save up $100,000-something, where I ended getting another one here in Denver or I can systematically save up $30,000 and get another one in North Carolina.” I like diversification, too. The one in North Carolina is not an appreciating market. It is going to stay the same but it cashflows nicely and I have that as my cushion. In Denver is where I’m at or, “This is where I’m trying to get rich,” kind of thing.

My mentor always states, and this is the route I’m leaning more towards after I buy this next house hack is the payoff phase, “Do you know what happens to a house that’s paid off and the market crashes? Nothing.” After buying this next one, if you do the whole Chad Carson Debt Snowball thing, I have all my houses paid off by the time I’m 31. That gets me to the true next step of $7,000 a month, so I would be cool with that, too.

I do like a little bit of leverage. Take some HELOCs out and all that stuff. BiggerPockets came out with an episode, maybe with this guy Thach Nguyen.

I’m going to interview him for my podcast. He’s my life coach now.

His whole idea of, “Getting $10,000 and paying it off, then getting $20,000 and paying them off.” It seems like cool little milestones that allow you to take a year or two breaks while you are paying those off because you don’t need to worry about investing more and all that stuff, too. It’s an interesting approach and a super nice safety cushion.

I like that method, and he’s making $100,000 a month in passive income, so it sounds like a guy you should listen to.

That’s big money.

If there’s nothing else, let’s head to the last part of the show. Anything else you want to say?

No. That’s it.

We will head into The Final Four.

Gerardo, what book are you reading now?

I don’t do actual books because I will probably fall asleep, so I do all audible. I’m reading Long-Distance Real Estate Investing by David Green.

I have heard good things about it.

ITF 19 | House Hacking
The House Hacking Strategy: How To Use Your Home To Achieve Financial Freedom

It is great. I’m learning and going based off of what Craig’s doing with the North Carolina thing but I’m looking in Ohio because these places are crazy cheap, and I could buy them cash.

What market?

Cleveland, Cincinnati, Dayton, or Akron, either one doesn’t matter.

I’ve got some contacts for you. We can exchange it later.

I need a property manager. That’s the only thing I need to pull the trigger.

We may have touched on this one but what is the best piece of advice you have ever received?

Definitely, delayed gratification. Gary Vee posted, “Everyone is buying things to impress people that they don’t like,” and I thought that was crazy because it’s so true. Nobody posts their failures on social media. Just because a person has a BMW doesn’t mean they are doing good. My mentor drives a Ford F-150 2007. He doesn’t even have tinted windows, it’s Arizona, and he’s worth $7 million. It’s delayed gratification, for sure. Do the Dave Ramsey thing as he said, “Live now no one else,” or whatever you said, and you said it better than me.

Craig, inquiring minds want to know what you drive because I don’t know what you drive.

I drive a 2011 Suzuki SX4 with a little bumper thing that’s duct-taped on. I definitely could be driving something a little bit flashier but I do prefer to go under the radar as well.

My car is a 2007 Subaru Outback. I’m embarrassed when I go on showings. I’m like, “I need to park around the corner.” We are all millionaires here. It’s all good. Tell us what your why is? You touched on it a little bit. What drives you now?

I have two. My first why is to quit my job and do something that I love doing. Every person is usually at their job anywhere from 8 to 10 hours a day, and if you are doing something you hate for 8 to 10 hours a day, that’s a shitty life. I want to do something. I don’t even care if I make the same amount of money. I can make $1,000 less but if it’s on my own terms, I’m happy. That’s my first why.

My second why is I didn’t learn a lot of stuff from my parents. Everyone tells me, “Your parents must be great with money.” It’s the opposite. The why I took this route is because they are not good with money, and they have taught me tons. I love my parents. They allowed me to do all this stuff. My mom works so hard, and she will probably never be able to retire because of the amount of debt and things like that. My goal, once I get enough money, is to help my parents pay off their home, so they could retire early. Even at 50 or 52, that’s still earlier than 65. That’s my why.

Last official question, is the hot dog a sandwich? Why or why not?

Yes, technically, there’s meat and bread, so it’s a sandwich.

Fair enough. That was a great debate. In my BiggerPockets days, we would always ask the interviewee that question, and the answers were always funny.

I have never thought about that. I never put ketchup on a sandwich. That’s probably the only one I do.

Where can people find out more about you if they want to learn more about you or get in contact with you?

You could probably find me on Instagram. It’s @Jus_G_. I don’t post much but now that I’ve got another interview that I’ve got to do with this, so I’m going to start posting a lot more. I’m going to post my first house back there. If you guys have any questions or anything like that, I’m in Arizona. I attended my first Meetup, and it was great. Hit me up if there are any questions.

It was great to have you on the show. Honestly, you were a great guest, and you’ve definitely got a cool story.

You know what happens to a house that's paid off, and the market crashes? Nothing. Click To Tweet

Thanks. I appreciate you guys letting me come on and taking the time. I’m blessed to be here. Thank you.

Take care.

Thanks, Gerardo. We will see you.

See you later.

That was Gerardo Hernandez, everybody. Z, what did you think?

It’s such a good story. It’s inspiring. I also love that he didn’t sound super prepared or anything. He still made a great portfolio for himself, and he’s got a long way to go but a lot of real promise. It’s a story that a lot of people can relate to and get started with.

The biggest lesson from this episode is, 1) Take action, and 2) One thing he could have messed up on was not learning beforehand, so I do recommend trying to learn a little bit more beforehand but you will notice that once he started learning, he went back and fixed his mistakes. He upped the rent, redid the properties, and started cashflowing a lot more. He hit financial independence before he even realized it, and the main function of that is keeping expenses low.

It’s a great story. It’s a cool episode. If you guys liked that episode, and you like our show so far, please leave us a rating, a comment or a review. We always like feedback. We always like to see what we can improve on and what we are doing good at. If you could, that would be amazing. It makes and breaks the show. Other than that, we will see you all in the next episode.

See you guys later.


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