Ben Welch | Dan Mackin
105: Full-House House-Hacking with Tom & Michelle Gendron
Circa the beginning of 2019, Tom & Michelle Gendron had just gotten out of debt and were ready to begin investing seriously for their future, both as husband and wife, and as mother and father. They dabbled with the idea of strategically purchasing stocks and holding off on buying rental properties until they had more capital available. Afterall, they were already living in their “forever home,” and were in no rush to become property managers.
Nonetheless, after some intense research and education about the industry, not only did Michelle learn that buying real estate with low capital was a possibility, but that they can do it much sooner than “later down the road.”
Circa the end of 2019, Tom & Michelle had purchased their first out-of-state rental property and were cash flow positive.
Up to date, Tom, Michelle, and their four children are House Hacking in a cozy 900sqft home filled with love and excitement for the financial opportunities ahead. The goal for the next five years is to surpass $10K in passive income to be able to travel the world with their children and grow together as a family.
Takeaways from our conversation with Michelle and Tom:
1) Delay gratification. This is the theme of Tom and Michelle’s entire investing journey. This is how they were able to uproot their life and have the guts to downsize. This is how they embrace the sacrifice it takes and do it as a family. And this is how they will ultimately achieve generational wealth that will enable them to have enough passive income to live the life they so choose. Stop and think about your future self the next time you feel yourself caving into instant gratification.
2) Investing out-of-state in the eyes of a “hands-on” type of person. This was a blessing in disguise particularly for Tom because he considers himself to be a very hands-on person. With their first BRRRR (Buy, rehab, rent, refinance, repeat) property being out of state, Tom was forced to learn how to trust others in taking care of their investment (such as managing the property and completing the rehab work). Furthermore, if you are a hands-on person who wants to have a hands-off business, you’ll be forced to learn to leverage systems to make your investments successful. Don’t shy away from uncomfortable situations, use it as an opportunity to grow.
3) When reading a real estate book (or other books in general), follow along with the action steps contained in the book. It does you no good to read all the how-to books in one sitting and then only remember the last thing you read. And it certainly does you no good, either, not taking action after reading a book as well. So when there are action steps included in a book, follow along and practice the action steps. So when it comes time to take action that counts, you have already gone through the motions and will be less of a novice going in. Take it from Michelle, they found their first property on a classified ad on an online newspaper because the book she was reading mentioned it. She called the number on the ad and instantly got a $5,000 discount on the purchase price no questions asked.
4) Talk to the people outside of a property showing. Whether it be a neighbor or the homeowner themself, it doesn’t hurt to strike up a conversation with anyone who is even remotely associated with the property you are thinking of purchasing. At the very least, you’ll know someone that lives in the neighborhood and have extra “behind the curtain” knowledge about the property. As for Michelle and Tom, on their second property purchase (the triplex they are currently House Hacking), while Michelle was touring the inside of the property, Tom struck up a conversation with the homeowner who was sitting in her car outside in the driveway. In the end, they beat a cash buyer in getting an offer accepted to purchase the property because they had an edge in the relationship with the seller.
If Michelle could go back and talk to her 16 year old self, she’d tell her, “Get outside of your comfort zone. Try all sorts of new things. See what’s out there.”
An unexpected benefit of real estate investing, Michelle said, was getting to a financial freedom number.
A piece of advice Michelle would tell her friends looking to get started in real estate would be to “Go out and meet people who are doing what you are thinking you want to do.”
Michelle recommends using The Facebook Marketplace to help you sell things you don’t need anymore (so you can have more money to invest in real estate!).
Michelle recommends reading The ONE Thing by Gary Keller and Jay Papasan to help you focus on your priorities and accomplish your goals in the best way possible.
If Tom could go back and talk to his 16 year old self, he’d tell him, “Educate yourself on finances. Start early.”
An unexpected benefit of real estate investing, Tom said, was the ability to not only imagine, but also achieve early retirement.
A piece of advice Tom would tell his friends looking to get started in real estate would be to take initiative. “This is hard to do. But with hard work, it’ll pay off. So if you’re willing to put in the work… there’s a lot of free content out there to learn,” Tom says.
Tom recommends using Things app to help you stay productive and accountable with your tasks.
Tom recommends reading Extreme Ownership by Jocko Willink and Leif Babin to help you develop your leadership skills for business and life.
If you’d like to get in touch with Tom and Michelle, follow them on Instagram @lifebydesignfamily
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