Tony J. Robinson (3:17)

And was this property just listed directly on the mls?

Steel Evangelisti (3:20)

Yeah, this was an MLS listing. I found it on Zillow. I like took so much pride and joy in this when I first found it. Looking back now is so stupid, but I was so dialed into looking at Zillow as soon as something came up. So when this house popped up within two minutes I texted my agent and said, we gotta get over here. Like this is $20,000 undervalued. We went over that night, saw it, put the offer in the next morning. They, the sellers wanted to hold off on accepting our offer. They were hoping for a little bit of competition. And after our time of, time is of the essence, ran out pretty much like the deadline on your offer, I went to my agent, said how can we get them to move? Because we knew they didn't have any offers, any other offers in yet. And she said, hey, let's just knock our price down a little bit and put the pressure on them to make a decision. If they're going to keep playing around, then they're going to keep losing out on money. So I end up getting it for five grand under, under what I was originally offering. And I was like, oh, this is even better. This is a great buy in the first place. Now I'm getting it for five grand less. Sweet.

Tony J. Robinson (4:23)

Yeah, that's a good agent. I love that tactic. Like, hey, we're just going to keep decreasing our price every X number of days until you say yes. And they can just literally see the money drifting away. What about the financing side still? How did you, how did you structure the financing for this first purchase?

Steel Evangelisti (4:39)

So leading up to purchase in my head the whole time I'm thinking I'm going to do a 3 1/2% FHA loan. That's what everyone talks about on Instagram or TikTok or whatever. In reality, if you want to buy a place that's a fixer upper, you're probably going to have to go conventional. FHA has a lot of restrictions on certain things. Just because they don't want to finance a place that you know, has a lot of work to it. It's a little bit of a liability from them. It's just a, you know, it's stricter way to get a mortgage for a house. Once I realized that, I decided to go with the 5% down conventional loan, did 3% seller assistance which is towards your closing cost. And that was a very affordable way for me to get into my first deal because obviously I just graduated, didn't have a ton of money in the bank. It was just everything that I, I made in high school and in, in college in like the first month of you know, full time paychecks once I, once I was done steel.

Ashley Kerr (5:31)

Can you talk about that seller assist, what is that and how did you get it?

Steel Evangelisti (5:34)

Yeah, that's like my favorite strategy for as an agent. Now for buyers who are trying to get into their first time home or even if they're just trying to keep some money in their pocket, it's basically a chunk of cash that the seller is willing to take off of their proceeds from the sale and put towards the buyer's closing cost. So if you bought a house for $100,000 and you got a 3% seller cyst, the seller is willing to take $3,000 and put it towards your closing cost. Essentially money in your pocket rather than coming down purchase price. Because if you're paying that over 30 years, it's not going to change that months that much for your monthly payment. But getting it right up front is, is usually more valuable depending on your strategy. But for most cases that's, that's what the situation is.

Tony J. Robinson (6:18)

So still you did a live in flip slash house hack. What was the rent situation and how did you increase the income on the units?

Steel Evangelisti (6:25)

Yeah, so when I bought the place, only one of the two units was currently rented out. They had it at $600 a month which as is was undervalued by about 300, $350 so I walked in day one, got a renter into the the unit that was vacant for $900. So that's immediately 900 bucks more than what the previous owner was making. I moved into the unit that the tenant was currently living in. Had to do the dreaded like kicking them out kind of situation, but gave them, you know, a 30 day notice, which is tough, but they were on a month to month and you know, it's just something you have to do. They, they were super respectful about it. They cleaned the place up, honestly better than I probably would have. It was absolutely spotless. Moved in there, it took me about six months to flip the place, but that was working a full time job and doing everything myself. I did all the work myself, didn't outsource anything.

Ashley Kerr (7:20)

Did you have any construction experience or Is this a YouTube university story here?

Steel Evangelisti (7:26)

Yeah, disclaimer. Absolutely none at all. I went to school for marketing. I grew up like in the sticks. So like, like, you know, I know how to use tools and everything, but didn't know anything about construction. But when you're in a house that you own, the risk is very little because if I mess something up, it's like, okay, it's my house, I can do that. Day one went into my, my bathroom. It's a two bedroom, one bathroom for each unit. Went in and demolished the whole thing. I just said, well, you know, you can't go wrong here. If I'm ripping down walls, ripped everything up. Within two weeks I had the whole thing renovated. And what's so nice about the Internet now is like I could watch tutorials on how to do full bathroom renovation. Walked in and did it in under $1500. Everything, tile, drywall, trim, new tub, shower walls, everything.

Ashley Kerr (8:17)

You know what steel? I'm only about a three hour drive away. You're h two weeks for a full bathroom renovation while working full time and learning as you're doing it all is actually pretty good.

Tony J. Robinson (8:32)

Pretty impressive. Yeah, man.

Ashley Kerr (8:33)

And for all under fifteen hundred dollars too.

Steel Evangelisti (8:36)

Yeah. Which is like so lucrative if you're trying to keep money in your bank and if essentially if you're poor, that's the best, best way to do it.

Tony J. Robinson (8:43)

I think there's like another hack now beyond YouTube University. And I've been thinking about doing this or at least testing it out. But if you, if you have chat GPT, they have like the, the voice mode where you can show chat GPT your camera. And I've tried it with like random little things, but I wonder if you could like just show chat GPT Hey, I want to renovate this bathroom or I want to install this tile and I wonder if it would literally like talk you through step by step on how to do it. I haven't tested that theory out yet, but I guess if you get another live in house hack or flip steel, you you let us know and you test it out.

Steel Evangelisti (9:20)

I'll definitely do that.

Ashley Kerr (9:22)

We're going to take a quick ad break, but when we come back we're going to hear more from Steel on the unexpected renovations for his first property and how he financed his second deal. We'll be right back.

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Ashley Kerr (12:01)

Okay, let's get back into the show with steel. So what ended up being your biggest challenge on this property as far as renovations go?

Steel Evangelisti (12:11)

Yeah, the biggest challenge is definitely anything that you weren't expecting to do. When I bought the place, obviously I had an inspection done. And what you love about inspection is they tell you everything that's wrong about the place, even if you're personally not going to be too concerned about it. So you have this whole list. They give you a report that says X, Y and Z need to be done asap. Then there's another list of things that need to be done within the next couple years and then just some other maybe cosmetic things. I begin my renovations and taking care of the items that I felt were the most pressing. And then within a month or so, I get hit with the first storm of the year of my ownership and realized that my front porch roof is leaking right where it lines up with the house. And this was causing rain to come inside of my siding, drip down into the window that was right below it, and then into my house. Pretty much like flooding my whole first floor because of this whole porch roof. $3,000 later, cash up front that weekend, Ripper comes over, takes care of it, drains my bank account. That's done with. Next day, right after the roofer's done my car, my car breaks down. I take it to the dealership for them to do a recall. If anyone doesn't know, recall is pretty much, you know, the company, the car manufacturer paying for a repair. I took it to the dealership and the mechanic left my car door open, drained my battery. He went to go jump my battery and had the cables flipped, which then fried my whole computer system in my car and ended up being an $800 bill. But you know, they covered it for me. But I'm like, how is this even possible? I buy this house, we're into it a month. I spent all my money on this bathroom, just spent three grand on this roof that I didn't know was an issue. And now my car is like completely shot because the mechanic hooks my battery up wrong. It's like just, it was the perfect like eye opening moment for like landlordship. I'm like trying to get tenants in the house. It's just absolutely nuts.

Ashley Kerr (14:20)

It definitely shows you how important it is to have reserves in place and to expect the unexpected to actually happen. So steel, let's go into deal number two. So you're 22 years old and you've already hit deal number two. Where did you find this deal?

Steel Evangelisti (14:38)

Again, not proud. This found this one on Zillow. I like to take pride in my like off market deal finding abilities. That's like part of the reason I became an agent because I was finding so many houses and I'm like, man, if I had the money, this would be cash flowing like 1500 bucks a month, just like wild numbers. But like I can't afford it because it's a $500,000 house. Find this one on the market. It just got forgotten about by, by people, by investors. Got it for 240, 000. Did the exact same strategy that I did for the first one 5% down conventional loan with this one specifically I did a did where the seller covered my transfer tax. The city of Pittsburgh has kind of high transfer taxes. It ends up being like 5% in total. So 2, 2 and a half percent per party. Obviously didn't want to spend that on a $240,000 house up front because it's still poor. I don't have a lot of money. And at some point you max out the seller concessions that you can get the seller credits like that 3% I was talking about. So this is another strategy to get the seller to help pay some of your upfront closing cost. And then you get into a deal as cheap as you can, end up being like 17 grand up front again to this house. Given the situation that was, that was pretty solid in my opinion.

Ashley Kerr (15:58)

And for yet $17,000 down for a $240,000 house is pretty good. What, where did the 17,000 come from? Was this just from saving?

Steel Evangelisti (16:09)

The great thing about house hacking is it's pretty easy to save, especially when I was done with my renovations. I was just, you know, pocketing almost all of my income from my job. Also sold off like any possessions that I had that like I didn't care about. Like I had a snowmobile I sold as like 2 grand and just kept saving up. Something that they don't tell you when you're trying to bounce from house hack to house hack is you need somewhere to live. So I needed to have both apartments income to. To help my DTI so I could buy another place so quickly. Had to move back in with my parents for two months, which is like who wants to do that after you're already moved out?

Ashley Kerr (16:47)

Hey, the sacrifices, man. Yeah, my mom welcomes me back home. I free meals.

Steel Evangelisti (16:53)

Well, they ended up kicking me out. They kicked me out. So then I had the. Luckily my girlfriend's house is like 10 minutes from mine. So I went over to their house for another like six weeks and I said okay. Every week was like a thousand dollars I just got to put in my bank because like they fed me, you know, all I'm paying is for gas to go to my job. End up getting the save up roughly 30 grand. At that point I said okay, this is enough to where I'm comfortable buying a second place. Ended up getting this one. Have the same tenant. Pretty much inherited the tenant that was upstairs, kept him there, had to move the the first floor tenant out, which again, like if you've never done that, it's not the most satisfying feeling in the world to have to kick someone out. But he was cool with it. He kind of wanted to leave anyway, so it worked out nicely.

Tony J. Robinson (17:39)

And how are the cash flow numbers across your portfolio today still?

Steel Evangelisti (17:43)

Yeah, I mean so my first property I have at a 7.35% interest rate. So to cash flow on that is not easy. But luckily it's an affordable market. In my hometown, I get roughly 300 to $400 a month. I set aside a lot for Capex because it's a. It's older home. Something about the northeast is our homes are crazy old. This one's from 1924, so like you have to put away a ton of money for Capex. I have something every month that's going wrong with it. The second property, again, super old home, but the previous owner took care of a lot of the major items as new water heaters, new furnace, new roof. It's a brick home. It's really solid. Still, things go wrong. So I put put away a lot for Capex right now obviously doesn't cash flow. With me living in it as is, it would break even about $2,400 a month of income. Once I'm done with it, I'll get 28 to 3,000 of income, which will be about 400 again of cash flow. And that's at a rate of 6.75%.

Ashley Kerr (18:46)

You know, the, the cash flow is good, especially in today's market. And the thing that I'm really focused on though, as you're telling this, is that you're 22. And one thing that I have really learned, like I started investing 10 years ago, is that the value of your properties 10 years from now is significantly more valuable than the cash flow that you got over the years. And I'm just thinking you will be 32 years old in 10 years and what those properties will be valued at and you know, how much your mortgage will be paid down by then in those 10 years and what the equity will be in the home. So congratulations on getting started so young.

Steel Evangelisti (19:31)

Well, thank you. And like huge shout out to like principal pay down. If you're not doing that. That's like I do an extra $100 a month towards my principal. It changes your, your interest that you pay over time by insane amounts of numbers. And also your loans, it changes by like five to seven years even if you do $100 a month.

Ashley Kerr (19:49)

Yeah, that's great advice. And another one too is like pay every two weeks instead of every month because if you pay like your mortgage payment, like half of it a little bit early, it will reduce your interest paid over time too. Okay, so before we kind of close out here, Steel, what do you wish more rookies knew about house hacking?

Steel Evangelisti (20:12)

House hacking does not have to be buying a duplex. It doesn't have to be buying a quadplex. I know to some people that's less than desirable because like, who wants to, you know, be a landlord to some tenant next door? A lot of people like to have their privacy. It is a big sacrifice that you have to do. And like we were saying earlier on, you sacrifice for the greater good. In the long run, house hacking can be as much as living in your parents house, renting out a unit, renting out a room in your house, having like your best friend pay you some rent, even to just hang out with you. If you have a boyfriend or girlfriend. I charge mine $700 to live in mine. That's house hacking. It's just a way to cut down on your monthly payments that you're making. Towards your pretty much for everyone. Your largest bill every month. And it's super lucrative because if you're gonna try and cash flow $700 a month or a thousand dollars a month, that's gonna be very difficult to do. But if you have someone helping pay your own living expense, it's pretty much doing the same thing. And then you get to put more money in your pocket, more money in your bank account, and, you know, work towards what probably everyone here is listening to is trying to do.

Ashley Kerr (21:21)

Well, Steel, thank you so much for joining us today and coming on to the real estate rookie podcast. We really appreciate you sharing your journey. Where can other rookies reach out to you and find out more information?

Steel Evangelisti (21:34)

First place I'd go to is Steel sells Steel City on Instagram. That's my real estate account. We have an insane goal of me trying to hit $10 million in sales by the end of the year. Just started like a video blog for that, just to see how the journey is going. So hit me up there. Obviously, can DM me. I'm in bigger pockets too, so you can find me there.

Ashley Kerr (21:54)

Well, still, thank you so much. And I'm Ashley and he's Tony. And we'll see you guys on the next episode of real est Rookie.