what's up you guys it's Graham here so as your real estate agents in real estate investor I'm going to be sharing with you guys exactly how you can cover all of your housing expenses and essentially live for free without ever having to pay rent or come out of pocket for a mortgage every month now if you do this right you could actually get paid to live for free and here's how I by the way it's not just [ __ ] like via house sitter live off the grid or better yet move in with mom and dad it's none of that so before I get into it at some point to another all of us will have to either pay rent or pay a mortgage for their housing expenses it's pretty much unavoidable now we go to work and we exchange your time and our resources for money which then gets funneled through our housing expenses and generally speaking housing is one of the largest expenses that you have so until the end of the world but it's still an expense that's going to have to come out of pocket every single month now when you already have a savings in you're about to make the job into buying a property one of the things that so many people overlook its multifamily properties and this is why it's such a good opportunity and these are two to four unit homes like duplexes triplexes and for plexes which means instead of having one house on one lot you can have two three or four units on one lot now for loan purposes this is treated the exact same as if you are buying a house or if you were buying a condo now what makes this really unique is that you have other units on your property that you can freely rent out to cover all of your property expenses not only that it gets better you can also count the anticipated rental income of the other unit towards your own income and qualify for a larger loan so in one situation if you can normally qualify on your own for a $400,000 mortgage if you buy a multi-family you can take the anticipated rental income of the other units that you would be receiving count that is income you will be receiving and get a larger loan which means that you might be able to qualify for a $500,000 loan or at $600,000 loan just based off the anticipated rental income that the other units will bring in now when you buy these properties correctly the rental income you're going to be receiving from the other units is enough to cover all of your ownership crops of the property including your mortgage your taxes your insurance your repairs your vacancy everything and you can live in one of the units essentially for free from there so I'm going to be making up a very simple example just to give you an idea of what it's like and then I'll show you some real-world examples of property I've been looking at so let's say you find a four unit property in the cost is 500,000 dollars each unit you can probably rent for about 950 dollars per month now remember this for unit so you're going to be living in one of the units and you can rent out the other three units each for 950 dollars and let's also assume you're a baller and you put 20% down which is $100,000 this means you paid $100,000 down and the bank is loaning you $400,000 towards buying this property your mortgage on that $400,000 it's going to be about $1,900 per month your property taxes on average will be about four hundred and twenty dollars per month insurance might be about $150 per month and then we'll tack on another $200 a month for other little miscellaneous things that might come up now the total expense of the property is going to be about twenty-six hundred and seventy dollars per month now obviously for all these real estate gurus in here I'm simplifying things a lot but I'm just trying to give you a general understanding of what the principal is that I'm talking about here now remember you're living in one of the unit and you're receiving nine hundred and fifty dollars a month for the other three unit that means from the three units that you're renting your receiving twenty eight hundred and fifty dollars per month gross rent this means you can live in the fourth unit collect twenty eight hundred and fifty dollars per month and still walk away with a hundred and eighty dollars per month in profit this also doesn't include all the tax benefits and deductions you can get by owning real estate and living in it as a primary residence this means you can to talk to one fourth of all the mortgage interest that you pay one fourth of all the property taxes that you can pay and then use all the other expenses as right up against the income that you're already making from the other unit so now let's take an actual example from a property that I was actually looking at and thinking about buying now keep in mind Los Angeles is terrible for its return it probably has some of those lowest returns in terms of purchase price for rental income probably the entire country maybe besides the New York and San Francisco so this isn't necessarily the best example but it is an honest real world example of properties I was actually looking at buying for myself other areas are obviously going to be much better for finding great cash flowing multifamily properties that Los Angeles doesn't offer but just keep that in mind you'll probably find much better opportunities in other areas so this is the property it's 3006 Chesapeake and I would probably be going in with about 20% down which means my mortgage would probably be about twenty three hundred and thirty dollars per month and a four percent interest rate over thirty years property taxes will probably be about six $35 per month I'll probably pay about 150 dollars per month in insurance I'll throw in about $185 per month in random expenses and repairs so on average it'll probably cost me about 3,300 dollars per month and that is with a thirty-year fixed-rate loan at 4% with 20% down now on this property I'll probably get about twenty six hundred and seventy two dollars per month in rent now that means once you deduct the twenty six hundred and seventy two dollars from the $3,300 actual cost that means it's actually going to be costing me about six hundred and twenty eight dollars per month out-of-pocket to live in this property but it definitely doesn't end there now keep in mind out of the twenty three hundred and thirty dollars I pay every single month seven hundred and sixteen dollars of that is applied directly towards the principal paying down my loan so when you apply to seven hundred and sixteen dollars which is six hundred and twenty eight dollars I'm out of pocket every month you actually come out ahead about $100 per month living in this property essentially for free it's also doesn't include the tax write-offs of owning real estate which means I can deduct one-third of the interest F and the mortgage I can deduct one third of the total property tax bill and I can deduct all the expenses related to renting out the other units if we factor all of that in for me at least this is probably worth about $300 per month so essentially I can live in this place for free and get paid after all my tax write-offs paying down the equity and everything about three hundred dollars per month and now keep in mind living for free and making three hundred ollars per month in Los Angeles for owning a property is incredible so here's another example at 2817 Norton so keep in mind same loan as before 20% down thirty-year fixed at about four percent that means my mortgage on this property is going to be about $3,100 per month I'm going to pay about eight hundred and forty three dollars per month in property taxes but $150 per month in insurance I'll throw in a bit more than $100 a month in repairs just to keep it a round number here but my total out-of-pocket expenses on a property like this will probably be about 4,200 dollars per month no of that I'm going to be collecting three thousand and twenty one dollars per month in rent from the other unit which means I'm out-of-pocket about eleven hundred and eighty dollars per month but keep in mind like my other scenario you're also paying down your mortgage which means that nine hundred and fifty dollars per month of that it's directly applied towards your principal it's pretty much like a for saving Calibur every single month you're putting in money and the savings account is essentially the home that you're paying down this means that eleven hundred eighty dollars is out of pocket every month but I'm getting back about nine hundred and fifty dollars by paying down my equity this brings my total out-of-pocket loss at two hundred and thirty dollars per month by owning this property now in addition to that also keep in mind that I can just out one-third of the interest I pay my mortgage I'm going to be paying about twenty five thousand seven hundred hollers per year in mortgage interest and now what I write off one third of that and also one third of the $10,000 per year property taxes that I'm paying that's another two hundred and fifty dollars or more attached savings just by living in there that means I can pretty much break even and live in this place for free or I could come out a very small amount after all my tax write-offs and paying down the loan the trick is to find properties the cash flow really well after all of your expenses and tax write-offs like I said other areas outside of Los Angeles will do a lot better Los Angeles is a weird market where properties really cash flow very very very poorly if I went thirty minutes east of Los Angeles I can find properties all day long the cash flow with me living in there for free and I'd be able to make a significantly larger profit but living in Los Angeles you have to make some sacrifices so I'm totally okay with buying one of these properties and breaking even or coming at a pocket even a thousand dollars per month knowing that I'm going to break even after I do all my taxes now my biggest recommendation to maximize the profits and the rents that you get from a unit like this is to generally buy them vacant in need of cosmetic repair this means that as soon as you close on a property you can begin renovation immediately generally I like to look for properties that are in need of new floors paint landscaping cabinetry bathrooms countertops things like this that can be done in probably a few weeks so you really don't have to have a lot of downtime between the time where you're working on the property and when you can finally get it rented out plus if either of the two properties I just mentioned more awkward vacant I'd be able to go in right after closing renovate them up the rent and that would dramatically increase my cash flow on the property that's the downside by the way of living in Los Angeles and having a lot of these properties and rent control now keep in mind many people are doing this already and these are some real world examples of properties that I have looked at for myself now of course there are downsides to doing this and the obvious downside is it yet you have to manage tenants this can take a part-time job in and of itself I know for me it took me a lot of work in the beginning to get to tenants I have now right now I'm in a position where a lot of it is on autopilot a lot of its passive and it really doesn't require much of my time but in the beginning I spent a lot of time sifting through really really really bad penance to find the gem in the beginning it almost was like having another job that I really had to work at sifting through application systems tenants and making sure the places are rented but what's the rent in you find the right tenant things generally go pretty smoothly from there you're also going to have some shared common areas because you're going to be living in close proximity to your tenant so it's not really any different from living in an apartment or a condo per se but you do share some of the yard space and some of the common areas with other tenants it's definitely not for everyone but the good news is that when you're ready to buy another house or upgrade you already have an amazing cash flowing property then you can rent out the unit you're living in how to cash flow positive property and eventually when that property is paid off that's essentially your retirement right there with money coming in consecutively every single month from tenants paying you or you can essentially just live there's long term bank as much money as you can and essentially not have to worry about coming out of pocket every month for your housing expenses because you know it's pretty much already paid for my other tenants so with that said I really hope you guys enjoy this type of content I have so much fun making these videos and if you haven't already feel free to click Subscribe I'm basically trying to upload everything in my brain that I can onto YouTube whether it's real estate related car related vlogs money just whatever crap is going around in my head I basically 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