Real Estate Investing School Podcast - Episode 237: From House Hacking to Hard Money with Zeke Mangum

Release Date: February 17, 2025

In Episode 237 of the Real Estate Investing School Podcast, host Joe Jensen engages in an insightful conversation with Zeke Mangum, a 23-year-old real estate investor, hard money lender, and founder of Noble Marketing. Zeke shares his journey from a novice investor to managing multiple real estate deals, emphasizing the importance of creative finance, strategic house hacking, and the pitfalls he encountered along the way.

1. Introduction to Zeke Mangum

Joe Jensen welcomes Zeke Mangum, highlighting his impressive accomplishments at a young age. Zeke is not only involved in real estate investing but also delves into hard money lending, showcasing his multifaceted approach to the industry.

Joe Jensen (00:24):

"Today our guest is Zeke Mangum. Zeke's a 23-year-old real estate investor, hard money lender, and the founder of Noble Marketing."

Zeke responds with enthusiasm, setting the stage for a deep dive into his real estate ventures.

2. Zeke's Entry into Real Estate Investing

Zeke recounts his initial exposure to real estate investing during high school while saving for a church mission. Influenced by an electrician landlord who operated solely by collecting rent, Zeke became fascinated by the concept of passive income through real estate.

Zeke Mangum (02:02):

"I was like, that's crazy. So they don't work, like, they just, they just collect rents."

This early interest led him to explore real estate further, particularly through door-to-door sales after returning from his mission during the COVID-19 pandemic.

3. First Deal: Build to Rent – Challenges and Lessons Learned

Zeke's first foray into real estate was a build-to-rent project. Armed with $55,000 from a successful summer in door-to-door sales, he aimed to purchase a property without the traditional banking hurdles. Despite enthusiasm, the project faced significant delays and rising interest rates.

Zeke Mangum (00:00):

"I literally just showed up to the closing table with the cash and was able to get into it."

However, unforeseen challenges arose:

Zeke Mangum (05:05):

"It went two years. So it was supposed to be six months and it ended up going two years."

The prolonged construction period led to an increase in interest rates from 3% to 6%, forcing Zeke to sell the property on the day of purchase to mitigate losses.

Zeke Mangum (05:58):

"But I'm grateful I got out of that one because I saw one just barely sold for like 360."

This experience taught him the importance of understanding the risks associated with build-to-rent projects and the necessity of having more control over final numbers.

4. Second Deal: Successful House Hacking Near the University of Utah

Unfazed by his first setback, Zeke pursued a more controlled investment strategy—house hacking near the University of Utah. By purchasing a townhome close to campus, he executed a plan to rent out multiple rooms, effectively living for free while generating positive cash flow.

Zeke Mangum (09:47):

"I should have just bought something by the college that I could live in and rent out the rooms."

He swiftly secured a property after knocking on homeowners’ doors and capitalizing on his keen market insights. Renovations were minimal, involving the addition of walls to increase the number of rentable bedrooms.

Zeke Mangum (11:35):

"I lived there in the master collecting. It was, let's see, my monthly payment was 2,200. So yeah, I was collecting $800 a month after expenses to live for free."

This deal not only provided immediate financial benefits but also reinforced Zeke's confidence in house hacking as a viable investment strategy.

5. Third and Fourth Deals: Expanding Portfolio and Embracing Creative Finance

Zeke continued to diversify his portfolio with subsequent investments. His third deal involved another primary residence in Southern Utah County, utilizing conventional financing to secure a daylight basement apartment—a move that minimized construction risks.

Moving forward, Zeke's fourth deal marked his foray into creative finance. Partnering with a wholesaler, he acquired a property in New Braunfels, Texas, through seller financing. This approach allowed him to bypass traditional bank loans, lock in favorable interest rates, and generate ongoing cash flow.

Zeke Mangum (17:17):

"But it was so discounted and it's like a pretty new home is 2017. Didn't really make a lot of sense to not buy."

6. Embracing Creative Finance: Benefits for 1099 Workers

A significant portion of the discussion centers on creative finance strategies, which Zeke advocates strongly, especially for individuals with non-traditional income streams like 1099 workers.

Zeke Mangum (23:21):

"The biggest thing, especially recently, has been creative finance because I work 1099. I don't want to pay a lot in taxes."

Creative financing eliminates the need for credit checks and lengthy bank processes, enabling investors like Zeke to act swiftly and maximize tax benefits.

Zeke Mangum (24:19):

"You're able to move so much faster. You save so much in taxes that even if you like are barely overpaying for a property or anything like that, you're still way positive compared to what you'd be paying in taxes."

Joe Jensen echoes the importance of multi-faceted financing approaches, encouraging investors to explore both conventional and creative options to optimize their investment strategies.

7. Transitioning from Private Lending to Real Estate Assets

Having initially focused on hard money lending, Zeke now aims to shift his focus towards tangible real estate assets. While recognizing the stability and appreciation potential of real estate, he expresses the limitations of private lending, such as dependency on lending companies.

Zeke Mangum (28:26):

"I'm trying to transition to get that number from my private lending stuff just into mostly real estate stuff."

By prioritizing real estate, Zeke seeks to harness multiple income streams—cash flow, appreciation, tax benefits, and principal paydown—thereby establishing a more robust and secure investment portfolio.

8. Lessons Learned: Opportunity Costs and Taking Action

Throughout the podcast, Zeke emphasizes the critical lesson of opportunity costs—the potential gains lost by not acting on investment opportunities. His early experiences taught him that taking action, even amidst uncertainties, often leads to greater long-term benefits.

Zeke Mangum (39:48):

"Having money tied up into something where I couldn't really do anything else for a year and a half, I missed out on probably two or three deals."

Joe Jensen reinforces this notion, highlighting that in real estate, the cost of inaction often surpasses the risks associated with making investments.

9. Final Insights: Advice, Recommendations, and Future Goals

In the concluding segments, Zeke imparts valuable advice based on his experiences. He advocates for:

• Focus and Specialization: Concentrating on one investment strategy to maximize expertise and results.

  Zeke Mangum (43:08):

  "I like it because I think it's safe. I think it's a great investment vehicle, but it's like, what I understand better than anything else."

• Continuous Learning: Recommending resources like "Atomic Habits" by James Clear, which has significantly influenced his personal and professional development.

  Zeke Mangum (37:16):

  "One of my favorite books I've ever read is Atomic Habits by James Clear."

• Adding Value in Relationships: Emphasizing the importance of building meaningful relationships and contributing more than one takes.

  Zeke Mangum (36:32):

  "Try to add more value than you take."

Looking ahead, Zeke aims to continue scaling his real estate investments, partnering with others to expand his portfolio, and eventually achieve a passive income of $100,000 annually. Additionally, he aspires to acquire a personal cabin on substantial acreage, combining investment with personal fulfillment.

Zeke Mangum (35:08):

"We'll do more stuff like that. And that's what I think it'll look like from here on out."

Conclusion

Episode 237 provides a comprehensive look into Zeke Mangum's journey in the real estate investment landscape. From overcoming initial setbacks to embracing creative finance and strategic partnerships, Zeke's story underscores the importance of adaptability, continuous learning, and proactive decision-making in achieving real estate success. His insights serve as valuable lessons for both novice and seasoned investors aiming to navigate the complexities of the market.

For those interested in connecting with Zeke or exploring partnership opportunities, he can be reached via Instagram at @Zeke_Mangum, where he is open to networking and new ventures.

This summary encapsulates the key discussions, insights, and conclusions drawn from the conversation between Joe Jensen and Zeke Mangum on Episode 237 of the Real Estate Investing School Podcast.