Bricks, Mortar & Freedom

A Millennial’s Guide to Building Wealth Through Real Estate

“Landlords grow rich in their sleep.” — John Stuart Mill (probably the original **FIRE** influencer)

Table of Contents

1. 1. [Why Real Estate Beats Lottery Tickets](#why-real-estate-beats-lottery-tickets)
2. 2. [The Four Food Groups of Property Investing](#the-four-food-groups)
3. 3. [Financing Without a Money Tree](#financing-without-a-money-tree)
4. 4. [Finding Deals in a TikTok Market](#finding-deals-in-a-tiktok-market)
5. 5. [Due Diligence: CSI for Houses](#due-diligence-csi-for-houses)
6. 6. [Management & Optimization](#management--optimization)
7. 7. [Exit Strategies & Tax Sorcery](#exit-strategies--tax-sorcery)
8. 8. [Resources & Next Steps](#resources--next-steps)

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Why Real Estate Beats Lottery Tickets {#why-real-estate-beats-lottery-tickets}

| Asset Class | Tangible? | Leverage Friendly? | Tax Shelter? | Emotional ROI |

|-------------|-----------|--------------------|--------------|---------------|

| Stocks | ❌ | 🚫 (margin scary) | Meh | 📉 |

| Crypto | ❌ | Liquidation city | IRS side-eye | 🎢 |

| Real Estate | ✅ | 80 % LTV norm | Depreciation | 🏡❤️ |

- **Cash Flow**: Tenants pay you; your Apple stock never Venmos you rent.

- **Appreciation**: Historically 3–4 % above inflation—plus *forced* appreciation via renovations.

- **Depreciation**: The IRS lets you “lose” money on paper while your equity grows.

---

## The Four Food Groups of Property Investing {#the-four-food-groups}

### 1. House-Hacking 🏠

> Buy a **duplex**, live in one side, Airbnb the garage, retire the W-2.

- *Pros*: 3.5 % FHA down payment, on-the-job training.

- *Cons*: Sharing a wall with your tenants (noise-canceling headphones recommended).

### 2. Small Multifamily 🏘️

- 2–4 units; still residential loans but scaled cash flow.

- **Pro tip**: Lenders count 75 % of rents toward your income—*hello, qualification!*

### 3. BRRRR (Buy, Rehab, Rent, Refi, Repeat) 🔨

| Phase | Key KPI | Tool Belt Item |

|------------|-----------------------|-----------------------|

| Buy | 70 % ARV rule | PropStream comps |

| Rehab | $/sq ft budget | Home Depot 4-hour van |

| Refi | 75 % new appraisal | Local credit union |

### 4. Syndications & REITs 🏢

- **Syndication**: Pool $50k into a 250-unit deal, get mailbox money and K-1s.

- **Public REITs**: Liquid like stocks, but correlation to S&P 500 is ~0.6—*not* a bond proxy.

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## Financing Without a Money Tree {#financing-without-a-money-tree}

> “You don’t need money; you need creativity and a credit score above 700.” — Every BiggerPockets podcast ever

### Low-Down-Payment Hacks

- **FHA 203(k)**: 3.5 % down + rehab budget rolled in.

- **VA 0 % down**: If you served, Uncle Sam’s got your back.

- **Conventional 5 % down** on duplexes (yes, still!).

### Creative Structures

1. **Seller Carry-Back**: Ask Grandma Seller to become the bank at 4 % interest.

2. **HELOC Snowball**: Tap your primary residence equity for the next down payment—*rinse responsibly*.

3. **Subject-To**: Take over existing mortgage payments; deed changes, loan stays in seller’s name.

---

## Finding Deals in a TikTok Market {#finding-deals-in-a-tiktok-market}

### Off-Market Fishing Holes

- **Driving for Dollars**: Spot distressed houses via Google Street View, then send *handwritten* yellow letters.

- **Probates**: Courthouse = free MLS. Look for *“Estate of…”* filings.

- **Facebook Marketplace**: Filter for “fixer-upper,” sort by newest, message before the algorithm does.

### KPI Filters (set them in your CRM)

- Price < 70 % ARV

- Days on Market > 45

- Zip codes with population growth > 1 % YoY

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## Due Diligence: CSI for Houses {#due-diligence-csi-for-houses}

### Checklist (print & laminate)

- [ ] **Roof**: 3-tab shingles older than 15 yrs? Budget $5–$7/sq ft.

- [ ] **HVAC**: Serial number lookup on [Building-Center.org](https://building-center.org) → age & recalls.

- [ ] **Rent Roll**: Verify lease dates, deposits, *and* pet rent (it adds up!).

- [ ] **Crime Map**: [SpotCrime.com](https://spotcrime.com) heat map—avoid red zones unless you’re Section 8 savvy.

> ⚠️ **Never skip the sewer scope.** Tree roots don’t negotiate.

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## Management & Optimization {#management--optimization}

### Tenant Screening Stack

1. **Cozy.co** (now Apartments.com) – credit + background

2. **Landlord reference call script** – *“Would you rent to them again?”* (pause = answer)

### Maintenance Reserve Rule

> **$250 per unit per year** for roofs, HVAC, and *oh-no* moments.

### Value-Add Ideas

- **Coin-op laundry**: $3 wash + $2 dry × 4 machines × 50 loads/mo = $1k/mo.

- **Rubbish valet**: Tenants pay $25/mo to leave trash outside their door—outsourced to gig workers.

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## Exit Strategies & Tax Sorcery {#exit-strategies--tax-sorcery}

### 1031 Exchange Cheat Sheet

1. Sell Property A.

2. Identify 3 potential replacements within **45 days**.

3. Close on one (or more) within **180 days**.

4. Defer capital gains **forever**—or until you die and heirs step-up basis.

> “Swap till you drop” is morbid but profitable.

### Depreciation Recapture Loophole

- Offset with **cost segregation study** → front-load 5-, 7-, 15-year depreciation.

- Pair with **bonus depreciation** (2025 = 60 %); convert ordinary income into passive losses.

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## Resources & Next Steps {#resources--next-steps}

- **Books**

- *The House Hacking Strategy* by Craig Curelop 📘

- *Best Ever Apartment Syndication Book* by Joe Fairless 📗

- **Tools**

- [DealCheck.io](https://dealcheck.io) – underwrite in 90 seconds.

- [Stessa](https://stessa.com) – free bookkeeping built for landlords.

- **Community**

- **Local REIA meetups** – Google “[your city] real estate investors association.”

- **Twitter Spaces** – search #REI; bring coffee and thick skin.

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> **Final Thought**

> The best time to plant an oak tree was 20 years ago; the second-best time is at closing. See you at the title company—laptop and *caffe americano* in hand.