Speaker 1: 0:00

Welcome to the Ascend your Success podcast. Whether you're just starting out or are a veteran looking to grow your business, you're in the right place. Join us to learn how to achieve financial freedom while working and living life on your own terms. Hear valuable insights, strategies and interviews with successful entrepreneurs. Get ready to achieve the success you've always dreamed of. Ready, let's go.

Speaker 2: 0:26

What's going on, guys? My name is Wyatt Reed and this is the Ascend your Success podcast, and today I get to interview my friend Michael with Be Someone podcast. We just got off of your podcast a couple of days ago and I was like dude, I got to have you on my podcast. So, dude, welcome. Thank you so much for being on here. Tell us a little bit about yourself and a little bit about, like, how you got started and everything like that.

Speaker 3: 0:48

Yeah, thank you, wyatt, that was a fun podcast.

Speaker 3: 0:50

So my name is Michael Hong, I'm in Houston, texas, and I got started in real estate because I had a full-time corporate job where every week I had to fly or drive to another city I was working in I think it was 38 states, and that was a big incentive for me to get into real estate, because my wife at the time was in college, she was in a master's program and she said you can do whatever you want, you know, while I'm in school, but when school ends you got to come home, you got to find another job, you got to do something, and I had been climbing the corporate ladder for a little while now and it wasn't looking like what I thought it would be, and so I was really, really pushed to get into single family real estate, specifically because I was trying to build up enough cash flow to replace my income and I learned that you don't need as much cash flow as you think you do, and me and my wife engineered our life to kind of be more simple and so we could retire faster.

Speaker 3: 1:56

I know people who need, you know, 50 houses to retire or 25 houses to retire, but it depends on what your standard of living is. But if you're really motivated and you control the cost in your life, it just takes a few houses to get to replace your income and pay your bills like that.

Speaker 2: 2:12

Yeah, for sure. I think we talked about this on your podcast too. It was the fact that you really need to set that goal and for me, whenever I set it and I help other people set it, like new students that are just getting in like the first goal is to replace your income right. That way, you've got your income coming in, you can still pay the bills, you can live like you've been living regardless, right. And then take a step back and say, okay, what's next?

Speaker 2: 2:38

Because if you just say I want more, I want more, I want more, you're always going to be chasing money and you're never going to be happy and you're never going to have that true freedom that you're talking about, where you wanted to be home with the family and things like that. Because I remember seeing people who I looked up to and when I finally got in and seen what their lives looked like, it wasn't the family that they wanted, it was they're out here hustling, chasing money and then their family's being broken and left to the side. So you've got to set goals and once you hit them, you've got to step back and reevaluate. But most people never step back and reevaluate. They just keep rolling and try to do more.

Speaker 3: 3:18

Yeah, that's right.

Speaker 3: 3:19

And when I was in the corporate world, I always looked up to my boss or maybe my boss's boss and I saw who that person was at my last job. I was there for seven or eight years and the guy comes in at the crack of dawn, is late, even if there's really nothing to do, and he was living paycheck to paycheck on. I think he was making maybe a quarter million dollars a year and he was miserable. He had a rough family life. He didn't get to be home every single holiday and I was thinking to myself, like what am I doing, what am I building or what am I striving to?

Speaker 3: 3:55

If I got to wait till I'm 60 years old to be this guy and then look at how his life is, I felt like I needed a change. Yeah, and so our first deal I got to give a lot of this credit to my wife because when we met and we had not got married yet, I told her what my plan was with real estate before we even got together, and she loved it and I said well, our first deal might be a house hack, and so How's that conversation look?

Speaker 2: 4:24

Does that is that I mean you said at that time you didn't have kids, or you did have kids?

Speaker 3: 4:29

Did not have kids then, still don't have kids now. God willing we'll be having kids this year or next year. And full disclosure, we don't even know if we can have kids. We've never tried, so we'll figure that out coming soon.

Speaker 2: 4:40

Heck, yeah, heck, yeah. Well, it's a lot easier to have that conversation without kids, for sure.

Speaker 3: 4:46

Yeah, yes it is. It's a whole different world, and so you know for those of you who don't know there's two ways to house hack. One you could buy a duplex, triplex or fourplex. You live in one unit, rent out the others. Or you can buy a house and live in out of state, and she lived in another city and so we were kind of in a rush to buy a place so we could move her here and start our life together. So we ended up giving up on the two to four unit and what we went for was a single family home and we were looking at houses that kind of fit. What we were looking for and this was maybe 2018, I believe so we're looking for houses that fit what we were looking for, where there's like the master bedroom is far away from all the other bedrooms and everyone's got their own bathroom and stuff like that. And so we ended up buying a larger house in an older community and we rented out the rooms. And the original plan was, if we could have half of our mortgage subsidized and I think at the time it would have been like we were paying 600 bucks a month or 700 bucks a month out of our own pocket, we'd be happy. But the miracle of real estate is the rents always come in higher than you expected. Property appreciates over time. The mortgage pays down over time. So within a year we were living rent free or mortgage free with just a couple of roommates and we loved it. I was traveling for work, I was gone all the time, my wife was working part-time and then was in a full-time college program and we learned that you get what you ask for in marketing, and so when we were finding roommates, we got people who lived the life. We were busy professionals we put like a desk and an office chair in each room, and people that just wanted a place to lay their head at night, and they weren't the party party kind of people, and so it was a really great experience for us.

Speaker 3: 6:28

House hacking More difficult when you have kids. For sure, if you're married, have kids, it's probably best that you go for the two to four unit situation and live in one of the units. But we didn't have kids at the time and my wife loved the arrangement. So fast forward, like we're like going for looking for financial freedom and we're like, once you have like no rent or very little rent, or like no mortgage or very little mortgage. The amount of money you can save is insane. You don't realize most of your income. People like to think like I'm going to get this six figure job, we're going to make so much money.

Speaker 3: 7:03

What I learned is your salary is set based on the cost of your living. They're not paying you what your labor is worth. They're paying you just above what it takes to have food, shelter, housing and a car. You know, that is it. Everything else is like there's a little bit of margin of play money in there, and so if you want to double your income at your job, that's possible. But it's a long, slow grind and then what happens is your cost of living increases with your salary, so you end up with the same marginal amount of money.

Speaker 3: 7:34

But if you can kind of hack the system and you pay your cars off and you have no car note and then you live for free, my God, I had more disposable income every month than my boss, who was making a quarter million dollars a year and couldn't even put money into his IRA. And so we hit what, like later learned, was called level one, financial freedom. I heard someone talk about this at a conference, so I'm stealing it. Level one financial freedom was your bills are paid.

Speaker 3: 8:01

But we didn't understand that at the time. We were just plowing money into our savings account and we paid off our cars quickly and we kind of always drive older cars that are still functional and still everything works on them and you just replace a part here and there, so we weren't trying to elevate our lifestyle. And then we started buying single family homes. So I started with direct mail and we were doing just the good old traditional high equity absentee out-of-state landlord list. You can pull a list from places like ListSource and lots of other data providers. And then we were sending letters saying I buy houses cash. We learned this from a mentor that I engaged with and it was really important for me to get a mentor. I did the house hacking thing without a mentor and that was fine.

Speaker 2: 8:46

I was going to ask you where did you learn about the house hacking thing? Was that like a bigger pockets thing? I know they're huge in house hacking. You know, brandon. Turner back in the day was huge on that.

Speaker 3: 8:57

Yeah, absolutely Absolutely. And so I started by listening to bigger pockets. Probably I don't know what was it 2014, 2015, 2016. I don't know when it was, whenever the podcast was still just Josh Jorkin and Brandon Turner Good old days yeah, good old days, for sure, and it's totally different now.

Speaker 3: 9:17

You know, they were still trying to figure out this whole BiggerPockets podcasting thing and no one really knew what they were doing. It was very organic, it was very authentic. I loved it back then. And so that was kind of like my master's degree in real estate, because they came out with an episode once a week and then at the end of that episode the guest would recommend a book and what I would do is I couldn't wait for the next week's episode, so I would read or listen on Audible to the book the whole week and try to finish it before the next BiggerPockets episode.

Speaker 3: 9:46

So I did that for four or five, six years. And so one of my private lenders told me and I stole that from him he said that was your master's degree in real estate, was doing that for many years. And then they have books on house hacking, there's blogs you can read, and so house hacking is not that hard to figure out. There are people that can mentor you on it and people that have models for, like, complicated markets like California or ADUs or something like that, but we figured that out on our own.

Speaker 2: 10:11

Yeah, I think it's important to figure out what you need to figure out to get your first deal done. That was best for you and easiest for you, and then you hired a mentor right after. I think that's to take it to the next level. And I always tell people that are listening I say this probably on every podcast but we're not telling you to do anything we don't do ourselves. Like me and you are both in masterminds. We got a couple of things we do together, like we hire mentors, like thousands and thousands of dollars for mentors, mentorships and you know events that we go to and things that we do to go and learn and be around people who are doing bigger and better things than us. So, like I think it's so important that you it just slingshots you, like, to the next level. You don't have to think about what you're doing. They tell you exactly what you need to be focused on. So you cut out a lot of that learning curve by hiring a mentor.

Speaker 3: 11:07

Yeah, that's right, and, if I'm remembering correctly, I've had four mentors that I've paid good money for in my life and then, as my life evolved, I've needed different mentors. I've had a single family mentor, a multifamily mentor now, which is something I'm getting into, and so as you, as your business rise, you're going to hit these plateaus and you're not going to know what to do next. Instead of you waste a bunch of money and figure out the wrong way, how to do things, you can go to someone and get their blueprint or get their expertise on it. But I wanted to get back to the single family stuff.

Speaker 3: 11:40

So when we started buying properties for ourselves on the single family side, we're living in a house hack in an older community, in an older home, in what some people might describe a rougher part of town. We might've heard fireworks at times a year when there wasn't fireworks, if you know what I mean. And we were buying, we were doing direct mail and we found the zip codes we liked, price points we liked, and we're sending direct mail and I'm buying houses in the suburbs on the west side of Houston and I thought it was ironic that we're driving 10-year-old cars. We're living in an older home in a rougher community, and then I'm driving to my rental properties outside the city, in the suburbs, where my renters, my tenants at BMWs and Mercedes and they lived in a nicer house than me, in a nicer school district than me, in a nicer community than me and then I would turn on the news or I would turn on YouTube and I would see these mean old landlords that are a ruin in the country and that are just taking advantage of people and my tenants would have nicer furniture than me and nicer cars than me and a worse credit than me and no liquidity and no savings compared to me, like when we would pull their credit reports and everything, and so that really impacted what I understood the American dream to be Like. It's not a, it's not a nice house on the hill and a nice car on that salary, it's. You got to kind of put the horse before the cart.

Speaker 3: 13:01

And so I feel like my wife and I did the right way, because we were buying houses in the suburbs and then this house I'm in right now was one of them that we were going to be a rental on, and I did the math and I told her.

Speaker 3: 13:12

I said, hey, babe, are you ready to no longer have roommates, because we can move into this that we were going to make a rental, make it our primary residence and then rent out our current home to a long-term tenant and then now we're going to be living for free.

Speaker 3: 13:27

So we started by living for free with roommates and then we transitioned to living for free in our own home, in a smaller home, a newer home in the suburbs, in a nicer part of town, and so I feel like we kind of climbed out, climbed up the hill the right way, whereas my coworkers, my friends, even my neighbors in this neighborhood, their mortgage is twice what mine is, because I bought my house for 50 cents on the dollar off market, doing it the right way, I use private money to rehab it and to buy it and I put in a long-term mortgage in my own name. The amount of effort I have to exert to live my life is half that of the people around me. Everyone around me still has nicer cars than me. I know their mortgage payment is higher than me and they are just grinding to get somewhere that they need to go, and all they know is to work harder for marginal increases in their salary, and me and my wife chose a different path. Reed yeah.

Speaker 2: 14:22

Yeah, I love that, I love that. So you house hacked, you hired a mentor. After that you started getting into single family and you talked a little bit about multifamily. So that transition what do you foresee your real estate journey looking like in the next five, 10 years? What does that look like to you?

Speaker 3: 14:43

So when we start, every time we buy a house, we tell ourself we're going to keep it forever, we're going to pay this mortgage off, this thing's going to double, triple, quadruple in value. And then what I learned is like to buy three houses, like to buy a house a year is great, to buy two or three houses a year is awesome, but what happens at least when I look at it is you get to a point where if you're going to buy, rehab and rent out and do the BRRRR method on 10 houses a year, it's less effort for you to go buy a 30-unit apartment complex or a 50-unit apartment complex. And so multifamily is appealing to me. The economies of scale are great. The cost of labor and materials goes down, the margin on the rent goes up and it's the same transaction, it's the same paperwork, it's just with more zeros.

Speaker 3: 15:31

And so for the last year or so I've been in mentorship for multifamily. I haven't made my first purchase yet. I have passively invested in some multifamily in the past, but I think I would feel really great about. In the Houston area where I live, somewhere between 10 and 30 units is going to be my first multifamily deal and I have partners that I can raise capital with and funding is not an issue to me and I have people that can help me get the loan and everything like that. So if you're in the Houston area and you have a small multifamily deal, reach out to me on Instagram at Michael B someone single family as well. Just, it has to be in and around the Houston area. I'm not an out-of-state investor yet. Maybe with Wyatt's help I can. I can get over that hurdle there and I can start remotely investing in other markets that that are more appealing to me.

Speaker 2: 16:20

I'll buy some in Texas and you can buy some in Tennessee and Alabama.

Speaker 3: 16:25

Let's do it, man. We were talking on the last podcast my, my, my. I have family in Northern Alabama, which is not far from where you're from, and I actually did a year of high school out there and live with family out there. So I love it out there, man. So I would love to learn more about investing in Northern Alabama. I love it, man, I love it Well come on out, Let me.

Speaker 2: 16:46

Let me ask you this what do you credit a lot of your success?

Speaker 3: 16:52

to today. You know there's I get asked this a lot and there's a lot of things that I could I could point to, but probably the number one thing was staying engaged with content Listening to. At one point I had 12 podcasts a week I was listening to. I was crushing one to two books a week. This is when I wasn't really doing real estate. This is when I was preparing for it. When you're doing real estate, you don't need that much content. There's a lot going on.

Speaker 3: 17:17

But I, you know, as a kid I always wondered whenever we would go to Sunday school or church. I'm like, why are people read? The Bible hasn't changed in however many years? Like, why do people read the same Bible every week? Like we all know it, we're all told the stories as a kid and then when I got into real estate, I realized why I will read Rich Dad, poor Dad once a year. So I read lots of new books, but there's a few books I put on rotation every year. I need to reach, need to reread it, because words in the Rich Dad, poor Dad never change, but I do. I change and I'm at a different part of my journey and different words in that book speak to me. So probably what kept me away from materialism and spending all of my money and not staying on this path was the fact that I was engaged.

Speaker 3: 18:02

I was going to local meetups. Free local meetups are all around you. Go to meetupcom, go to Facebook groups. There are free groups everywhere. There's a local RIA. Bigger Pockets has a directory where you can find local groups.

Speaker 3: 18:14

I was going to free local groups meeting people that were higher on the hill that I wanted to aspire to be one day I was watching Instagram reels and YouTube podcasts. I was listening to audio books. I was buying books. I have a top shelf behind me. I was on a quest to collect all of the signatures. My top shelf is all the books of authors that have signatures. Inside of there.

Speaker 3: 18:35

I was going to conferences collecting signatures and that kind of kept me on the straight and narrow and focused where, like, I don't watch Netflix anymore, I didn't watch any other kind of entertainment or show. That was my entertainment. Because the market is always changing. You can only consume so much content. I consume less content today because I'm in the business, but the market is always changing and the best way to stay connected to that is going to your local meetups.

Speaker 3: 19:01

Go to masterminds, connect with people and then keep consuming content, because I'm seven or eight years into it now and it's been a long like there's been a lot of distractions on the way, but just stay engaged with the community and make new friends my top five friends before I started in real estate. That's what my podcast is really about. The Be Someone podcast with Michael Hong is that I learned the secret along the way and I say this in the intro of my podcast is that the secret on my journey to be someone is friends, people around you, people you surround yourself with, because before I started in real estate, my top five friends didn't have a lot going on. Fast forward, seven or eight years later, my top five friends have way more going on than I do, or way smarter, way richer than me, and text me to check in with me all the time, send me links to upcoming events and invite me into masterminds, and so the probably consuming content one and surrounding yourself with the right people is two.

Speaker 2: 19:59

Yeah, I love that. Uh, besides Rich, since you're on the book besides Rich Dad, poor Dad, what do you recommend for these guys?

Speaker 3: 20:07

The big one for me Rich Dad, poor Dad, is a great mindset book. We all start there. Some people call it the purple Bible. I love that. I stole that from Jerry Norton and I love Jerry Norton, by the way. And the big one for me after that has got to be who, not how. Every problem in your business you shouldn't ask how to do it, you should ask who can do it for you. Uh, for me that's been my, who has been mentors, and then my other who has been VAs. Those have been huge for me and I learned that from the book. Who not?

Speaker 2: 20:34

how computer right now. So it's a good, good book for sure, for sure, well cool, well, tell us, tell us, we're coming up on time. How can people get ahold of you? How can they learn?

Speaker 3: 20:50

more from you. Tell us how to work with you. Yeah, follow my podcast. It's the Be Someone podcast with Michael Hong. It's on Spotify. It's on Apple podcast. You can also follow my YouTube channel. We post the whole podcast there Michael Hong on YouTube at Michael Be Someone. You can also follow my YouTube channel. We post the whole podcast there Michael Hong on YouTube at Michael B someone. You can also message me on Instagram Michael B someone on the IG. And then I give my cell phone number away because I haven't regretted this yet. So, guys, don't make me regret this. It is 832-301. Please text me. Don't call me. I get a thousand spam calls a day. I won't answer it. Just shoot me a text If you have any questions. Um, and if you're in the Houston area. You have a deal you want to send me. Please send it my way and I would just love to follow. I follow people back and I'd love to follow your real estate journey as well.

Speaker 2: 21:32

Heck yeah, man. Thank you so much for being on. Thank you for providing value. I feel like we need to do a part two to this because there's so much more we didn't get into. So we'll schedule that and get another marketing conversation going on too. But thank you so much for being on, man.

Speaker 3: 21:50

Yeah, I love it. Let's do another one where we talk just about marketing and closing deals and getting into seller mindset. I would love that.

Speaker 2: 21:57

Well, hey guys, if you heard anything that you like or you're like man, I'd love to get into that or be a part of that community that they were talking about. Go to ascendersuccesscom. Fill out the form. I'd love to have. I have a conversation with every single person personally that fills out a form, so you talk to me and, whether you're in or out, we'll see you on the next one.