September 29, 2022

How a Portland Man Invests in Real Estate to Become a Millionaire

  • Kai Andrew is a real-estate investor who makes tens of millions by “land hacking.”
  • His tactic includes dividing a person property into numerous moneymaking brief-expression rentals.
  • He endorses leveraging a person deal to safe the future a person and obtaining inventive with your properties.

Kai Andrew made a decision to buy his first household the 12 months following he graduated from college. 

It was 2006. He was 21, preserving what he was generating in his engineering position, and plotting to move out of his parents’ dwelling in his hometown of Portland, Oregon.

Upon noticing that property finance loan payments would be less expensive than month to month rent, he acquired a Portland townhouse with a most likely dangerous interest-only mortgage loan. He just lately told BiggerPockets’Real Estate Rookie” podcast that his monthly mortgage loan payments at the time were about $1,100.

He didn’t fork out a cent himself, he informed Insider.

Andrew rented out rooms in the residence to his brother and mates, and he utilized their contributions to cover the home loan payments and pocket “a couple hundred pounds a thirty day period.”

That apply — purchasing a property and leasing out areas in it to develop passive income — is regarded as household hacking.

The view outside of one of Andrew's investment properties in Portland.

The watch outdoors 1 of Andrew’s expense houses in Portland.

Kai Andrew


What is house hacking?

The expression “hacking” was coined by Maui millionaire Brandon Turner — a real-estate investing guru who has been preaching about pursuing financial independence as a BiggerPockets executive since 2012. BiggerPockets is a genuine-estate media organization that provides investing-assistance podcasts and has above 100 million downloads on iTunes.

Turner previously instructed Insider that the firm’s how-to-make investments material was so appealing for a person uncomplicated purpose: “I am virtually a picture of what is actually doable,” he mentioned. So are the podcast’s visitors.

Andrew, for instance, informed Insider he stop his day job by age 27 to focus on hacking whole time. He said he attained six figures a year with an expanded strategy. He’s not just renting out areas in his home: He also buys land, sites delivery-container small residences on it, and rents people out to vacationers on Airbnb.

He owns eight attributes — some of which he formulated himself — that generate 12 diverse streams of money and have built him a millionaire.

How do you get started off?

“Equity in real estate is the speediest way to develop serious, generational prosperity,” Andrew explained. Most Americans agree with him.

He recommended starting up smaller. “When you are in your 20s, you never want a good deal of space.” Buying a condominium or townhouse that you can manage at that age can be a major stage towards constructing that prosperity. Even better if there is an added room to rent out, like Andrew did.

The dining table and view from inside of one of Andrew's properties in the Portland area.

The eating desk and view from inside just one of Andrew’s qualities in the Portland space.

Kai Andrew


“Once you have that fairness, you can leverage it into a various residence,” Andrew mentioned. “You’re likely to have massive bubbles like ideal now, where you can consider edge,” he explained of the pandemic housing marketplace. Whilst property price ranges are sky significant, home loan fees are near document lows, and competitors is beginning to gradual. It could be a great time to get hackable qualities.

To be guaranteed, Andrew’s tips isn’t foolproof. There are a quantity of approaches to efficiently invest in serious estate, but it can be crucial to take into account what techniques are ideal at a presented time.

Although the pandemic housing marketplace is even now scorching, taking on an desire-only mortgage as Andrew did could establish far too dangerous if home prices decrease. If you’ve got mortgaged shorter-expression rentals, you have to have a steady stream of renters to pay out your money owed.

How can you get hacking even further more?

At this place, Andrew just isn’t essentially fearful about financing his investments. He is graduated to developing shipping and delivery-container households to be made use of as small-expression rentals on more rural land. 

A prefabricated delivery-container residence, he said, can be built with as minimal as $30,000 in funds. Even a flashier, far more personalized product is considerably less highly-priced to make than a real solitary-family members property and can mostly be designed in a few months.

In 2018, Andrew acquired 7 acres 35 minutes outside of Portland for $90,000, and he put about $450,000 into solo-building four container houses there, as perfectly as his own residence.

The sum of these two investments comes near to the median dwelling sale selling price in the Portland region ideal now. In Oct, that determine was $535,000, up 8.1% calendar year over 12 months, Redfin discovered. The median house sale selling price nationally isn’t as large. It truly is about $376,000, up 13.6% calendar year above 12 months.

One of Andrew's shipping container homes while under construction.

A single of Andrew’s shipping and delivery-container houses while less than building in the Portland spot.

Kai Andrew


Andrew explained sector investigate supported his tactic of developing short-time period rentals in a dear space: “I knew the occupancy costs of the spot were being about 40%, with average nightly prices of about $60 or $70 a evening.”

But then, all of the unexpected, his handful of “brand name-new, modern day container households that overlook a lake and valley” started off hitting 100% occupancy fees at $175 a evening, he reported.

“We accidentally produced a industry — a place,” Andrew discussed.

He mentioned those people rental models netted him hundreds of thousands of pounds a 12 months, but that he was effectively primed to double his preliminary financial commitment even without them: His enhanced house is now estimated to be really worth $1.2 million, he said.