From $12/Hour to 3 Rental Properties and Traveling the World

Anyone can invest in real estate. You don’t need a fancy degree, a big bank account, or a high-paying job to get started. Arden Williams and his then-girlfriend were both making just $12 an hour when they bought their first house. How did they do it? They got uncomfortable, slashed their expenses, and threw every extra dollar toward a down payment. Then, they brought that same approach to real estate investing—jumping from one house hack to the next and sharing space with multiple tenants. These “small” sacrifices paid off in a big way. Today, Arden owns three rental properties, and he just broke ground on his first accessory dwelling unit (ADU). But that’s not even the best part. With this simple strategy, Arden and his wife quit their jobs and used their rental income to fund a year-long trip around the world. Whatever financial freedom means to you—retiring early, spending more time with family, or traveling the world—real estate makes it possible. And in this episode, Arden will give you a repeatable blueprint for building the life you’ve always wanted. In This Episode We Cover The strategy that allowed Arden and his wife to quit their jobs and travel the world Two pain points that the house hacking strategy immediately resolves The step-by-step process for adding an accessory dwelling unit (ADU) to your property Money-saving habits that helped Arden fund multiple down payments Small sacrifices that (most) real estate investors don’t want to make (but definitely pay off) And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1342. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Henry Washington?

  Anyone can invest in real estate. You don't need a fancy degree, a big bank account, or a high paying job to get started. Arden Williams and his wife were both making just $12 an hour when they bought their first house. So how'd they do it? They got uncomfortable. They slashed their expenses and they threw every extra dollar toward a down payment. Then they brought that same approach to real estate investing, jumping from one house hack to the next and sharing space with multiple tenants. But these small sacrifices paid off in a big way. Today, Arden owns three rental properties and he just broke ground on his first ADU. But that's not even the best part. With this simple strategy, Arden and his wife quit their jobs and used their rental income to fund a year-long trip around the world.

• 0:45Henry Washington?

  Whatever financial freedom means to you, retiring early, spending more time with family, or following your passion, real estate can make that possible. And in this episode, Arden will give you a repeatable blueprint for building the life you've always wanted.

• 1:04Henry Washington?

  What's going on, everybody? I'm Henry Washington, co-host of the BiggerPockets Podcast. And today, we're bringing you an investor story with Arden Williams from Wilmington, North Carolina. So let's jump in. Mr. Arden Williams, welcome to the BiggerPockets Podcast.

• 1:18Speaker 01

  Thank you. Thank you. I'm honored to be here, honestly.

• 1:20Henry Washington?

  Why don't you tell us a little bit about your background and how the heck you got into real estate in the first place?

• 1:25Speaker 01

  Back in 2017, I graduated college. And after college, I didn't really have much of a plan, besides all I wanted to do was travel and be outside, still something I do today. So I ended up getting a job out in Hawaii and worked there for about six months. And then somehow found my way to the US Virgin Islands, where I ended up moving there with my now-wife. And then after COVID, we decided we needed some stability. And I ended up getting a job as a firefighter in Wilmington, North Carolina, where I am today. So November of 2021, I was finishing up the FIRE Academy. And at the time, we were both making like $13, $14 an hour, if that. And me and my wife ended up getting a house and ended up house hacking it with two of my fellow firefighters.

• 2:09Henry Washington?

  Did you purposefully buy that deal as a house hack investment because you had been, you know, researching real estate? Or did you buy a single family and house hack it because that's what you needed to do to be able to afford a place?

• 2:25Speaker 01

  Maybe a little bit of both. Back in Hawaii, I found a YouTube video of Brandon writing out like, buy a house every 10 years, one house every year, and ended up just kind of having it in the back of my mind of like, that's a great idea. Should probably look at doing that. I remember telling my wife about it. It's like, hey, we could just get roommates and we'll save a bunch of money. And if we want to like rinse and repeat this, we could.

• 2:47Henry Washington?

  Yeah.

• 2:47Speaker 01

  And hopefully continue to go and travel and do all the things we love to do. We were basically breaking even on our mortgage with just our two roommates and it worked out great for us.

• 2:56Henry Washington?

  So there was some intentionality in like the kind of home you selected? Because I assume you planned on keeping it after you moved out.

• 3:05Speaker 01

  Yeah, so we pretty much only look at three-bed, two-bath, single-family homes in our area for our price point. That's kind of all we could afford. So we ended up getting it for $285, which was 20K over asking at the time, which we thought we were absolutely insane. But it was 2021.

• 3:22Henry Washington?

  It was 2021. That was the game you had to play.

• 3:24Speaker 01

  Yeah, it was the game we had to play.

• 3:25Henry Washington?

  What's your interest rate, though?

• 3:27Speaker 01

  We got 3%.

• 3:28Henry Washington?

  Okay, that's awesome. So $285 paid over asking was a little scary. You got a 3% interest rate. Booyah, that's amazing.

• 3:35Speaker 01

  Yeah.

• 3:35Henry Washington?

  What was your mortgage payment?

• 3:38Speaker 01

  So at the time, I think it was like $1,300 something.

• 3:41Henry Washington?

  Did you put 5% down or did you put 20% down?

• 3:44Speaker 01

  So when we left the US Virgin Islands, we had saved up a good amount for our down payment. So it wasn't our plan to save it. We were just both, me and my wife are really frugal. So we ended up putting down about $30,000, actually.

• 3:58Henry Washington?

  What were you renting each room out for?

• 4:00Speaker 01

  So since they were my friends, I was trying not to gouge them on prices. But I think we ended up renting both out for about $700 a month.

• 4:09Henry Washington?

  So you're living for free, essentially?

• 4:11Speaker 01

  Basically, I think we ended up basically just paying the utilities, insurance, and stuff like that.

• 4:15Henry Washington?

  That's really cool. That's the whole point of a house hack. Well, that's half the point of a house hack. The second part of house hacking is it's only financially beneficial if you don't let life creep come in. So in other words, you've got to pretend to pay yourself rent or mortgage, right? So that you can actually realize the savings, not just absorb it into your lifestyle. Awesome. So that was 2021. House hack, conventional mortgage, put about $30,000 down, obviously living for free. I assume you moved out and kept it. So what kind of rent does the entire house pull in now that you're not living there?

• 4:53Speaker 01

  Yeah, so we actually just lost our original tenants from three years ago after we and my and my roommates moved out. They just left. And so we just got new tenants and they are renting it for $2450 a month. Our mortgage has gone up to about $1,550 a month with insurance and taxes and hurricane stuff, so.

• 5:13Henry Washington?

  That's still pretty cool. I mean, debt service of $1,550, but that includes taxes and insurance and you bring it in $2450. So that's a $900 surplus if you count a little bit for maintenance and some expenses. That's a decent amount of cash flow for a property that you just buy on the MLS that you got to live in for free. I'd say that's a win.

• 5:30Speaker 01

  Yeah, I was, we're very happy with that house.

• 5:33Henry Washington?

  I'm curious to know how that led to your second deal and how different those deals are. But we're going to dive into that right after the break. Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an

• 6:16Henry Washington?

  STR for the year, no furnishing required, making this the easy button to save five or six figures in taxes this year. And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited.

• 6:55Henry Washington?

  Learn more at biggerpockets.com/retirement or text REI to 33777. Again, text REI to 33777.

• 7:06Dave Meyer?

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• 7:39Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven. If you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash-out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high-interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out. Get approved for the Aven card and you'll get a $400 statement credit after spending

• 8:24Henry Washington?

  $400 on your Aven card. Enough to cover your entire annual Pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, NMLS #2042345. Cards issued per 2020 license from Visa USA, Inc. by Coastal Community Bank, NMLS #462289. Member FDIC, equal housing lender, subject to approval, terms apply. Visit aven.com for details.

• 8:45Speaker 03

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• 9:15Henry Washington?

  All right, we are back on the BiggerPockets Podcast. I'm speaking with investor Arden Williams, who successfully pulled off one of my favorite strategies, which is the house hack. I house hacked when I first got started. It was absolutely game changing. So I love hearing stories of people house hacking. So you pulled off your successful first one. You bought a three bed, two bath, paid 285. You're pulling in about 900 bucks a month in cash flow now. Did you do it again or did you change strategies on your next one?

• 9:43Speaker 01

  Uh, we basically did the exact same thing.

• 9:45Henry Washington?

  How long in between though? Like, was it a year, two years? How long did it take you?

• 9:48Speaker 01

  So it took us about a year and a half. So we bought November of 2021 and bought our next one in July of 2023.

• 9:56Henry Washington?

  All right. Tell me about this one. Give me the stats. Beds, bath, square footage. What'd you pay?

• 10:00Speaker 01

  We have a three, two, uh, 1100 square foot house downtown Wilmington. Nothing super special. It's actually 123 years old now.

• 10:08Henry Washington?

  Oh, wow. Yeah.

• 10:09Speaker 01

  Remodeled, paid 325 for it. I think at the time we had a 6.8% interest rate, but then we did something really silly a little about a year later. But it came with an additional lot.

• 10:22Henry Washington?

  Oh dope. I love deals like that.

• 10:24Speaker 01

  I still feel like I overpaid for that house, but then I have to remind myself that I got a lot basically for free. Cause when we split it, they valued it as we paid like $5,000 for it. And there's lots that size are selling for like $70,000 now.

• 10:38Henry Washington?

  Oh yeah.

• 10:40Speaker 01

  Like right now, it's funny because when we got it appraised when we first bought it to when we got like the Zestimate now, um, it's almost the exact same, but it does, but that doesn't have the lot attached anymore. So.

• 10:53Henry Washington?

  That's super cool. Sweet. So you paid a little more for this one. 325, 6.8% interest rate for the time being. Who'd you get to live in the house with you and your, and your wife this time?

• 11:04Speaker 01

  We had a friend of a friend move in and then we found, um, random when we put up on Zillow and we had them both renting from us. I think one was $800 a month. And the other one was $700 because one was a smaller bathroom.

• 11:18Henry Washington?

  Okay. And so what was your debt service on, on that mortgage?

• 11:22Speaker 01

  So we ended up putting a lot down on that one. We, we saved as much as we could from the last house hack. We knew that interest rates has gone up. I didn't realize how big of a deal that was until after we bought this one. And we ended up putting like $52,000 down. I think at the time it was around 19, little over $1,900 for, uh, the mortgage.

• 11:46Henry Washington?

  Looks like you were bringing in 15. The mortgage was a 19. So you had to pay a couple hundred dollars a month this time. But still you got an additional lot. So I love, I love that you repeated it for your second one. Even though you paid a little more, you had a higher interest rate, you had higher debt service. You were still able to offset your income. You're only paying a couple hundred dollars a month. On this one, when you moved out, were you able to rent it for a similar amount to the other one? Or is this one rent for more? Cause it's downtown.

• 12:12Speaker 01

  So it rents only for a little bit more. We've had the same tenants since we left, uh, there now. They're great. They're actually, uh, I'm also a Realtor now as well.

• 12:20Henry Washington?

  Yeah.

• 12:20Speaker 01

  And they're, uh, they're my clients and they're actually looking to purchase a house now, which is a shame because, uh, they're great tenants.

• 12:29Henry Washington?

  You're like, oh, I've been looking. I just can't find anything for you guys. I guess you have to stay.

• 12:34Speaker 01

  But they, uh, so they, they paid 20, $2,500 a month, but it has gone up. We did the silly thing of, uh, refinancing.

• 12:42Henry Washington?

  Did you pull cash out?

• 12:44Speaker 01

  No. So what we did is so we had to split the lot off.

• 12:47Henry Washington?

  Oh, got it. So you got a new loan when you did the lot split.

• 12:50Speaker 01

  Yeah. So we, we ended up splitting it and we didn't really think, again, we were like, what's one point? That's not going to be anything. So we split the lot up, uh, because we were going to build on it the next year. That was our plan was to like build and then, uh, move on.

• 13:03Henry Washington?

  Can I give you a piece of advice? Do not do the math on what the price difference is in what you're going to pay over the life of the loan.

• 13:12Speaker 01

  Oh yeah.

• 13:13Henry Washington?

  When you paid that extra 1% interest versus where you were. Just don't, don't look at it. It's done now. This is done now. Okay. So let's focus on the good part. The good part is another successful house hack. You, I assume you were just finding these on the market, uh, with an agent. You buy them. I like that you're putting a substantial amount of money down because then you're, you're essentially manufacturing cash flow. You're buying equity. And then I love the back-to-back house hack method. And I'm very curious what the next deal looked like.

• 13:45Speaker 01

  Yeah. So the next deal was actually a little different. So we actually decided to do a flip, Reno, Burr, kind of live-in flip was ultimately what it was.

• 13:55Henry Washington?

  Hey, again, I think this is another great owner occupied strategy, but it's not as cut and dry as a buying a house hack, because now you have to figure out how to take on a renovation. You have to figure out how you're going to fund that renovation. Did you have a plan in mind of like what size of a renovation you wanted to take on ahead of time? Like, did you know what you're looking for? Or were you just perusing, hoping to find something you thought might be decent?

• 14:20Speaker 01

  We wanted to do a cosmetic flip. So we wanted to do floors, paint. And then there was a, it's actually the room I'm in now. There was a wall right, literally right where the computer is. And we just wanted to tear that down. Uh, but we did get a contractor for that one. And then we ended up adding some projects on and, uh, now I'm redoing the things that I didn't know how to do the first time.

• 14:46Henry Washington?

  Classic. Okay. So first question, the obvious question is what did you pay for the property?

• 14:52Speaker 01

  So for the property, we ended up getting it for 270.

• 14:56Henry Washington?

  Is it a three, two, like the other ones? Or did you make it a three, two?

• 14:59Speaker 01

  Three, two. This one's about the same size, 11, 1200 square feet. And it's on like a half acre lot in Wilmington, which is pretty rare.

• 15:06Henry Washington?

  That's pretty cool.

• 15:07Speaker 01

  Which is going into like our next strategy with this house. Actually, we just got a permit to build an ADU on the back.

• 15:14Henry Washington?

  All right. So you paid 270. How much did you budget for the renovation? And then did you stay on budget?

• 15:21Speaker 01

  So I think we budgeted $30,000 for renovation and we, we actually did 25,000, just, just over 25,000. Yeah. And that was, half of that was just the contractor doing, blowing out the wall and putting drywall on the vaulted ceilings.

• 15:42Henry Washington?

  Awesome. What kind of loan did you use to purchase this? Did you just buy it on a conventional and then fund the renovation yourself? Or did you use, uh, like a 203K loan?

• 15:50Speaker 01

  30 year fixed.

• 15:51Henry Washington?

  Cause you know, there are live-in flip loans. They're, we've talked about them before. They're pretty tedious, but are very helpful.

• 15:58Speaker 01

  Yeah. I just was listening the other day to one of those and I was like, well, that would have been good to know like a year ago.

• 16:05Henry Washington?

  Okay. Okay. So you bought it conventional. How much did you put down on this one?

• 16:09Speaker 01

  So we ended up putting $40,000 down on this one as well.

• 16:13Henry Washington?

  Great. So I mean, I don't think there's anything wrong with the strategy. I think if you've got the capital to be able to pull it off, this is a great way to do it. If you don't have as much capital, yes, you can use things like a FHA 203K loan. There's like a home path renovation loan that either Sally or Freddie has that you can use. So there's definitely options for you if you want to do a live-in flip. This is cool because you're kind of doing all of the owner occupied real estate investment strategies. So it's, it's, it's really fun to hear somebody that, that, that's pulled that off. So have you had it appraised since you've done it? Like, do you have an idea of what it might sell for if you were to sell it soon?

• 16:52Speaker 01

  So we actually just got appraisal done for the HELOC, uh, for the ADU, uh, that, that we ended up pulling out and it, it appraised for 300, uh, which I was less than thrilled about, but I'm long-term investor, so I'm not planning on selling it anytime soon.

• 17:08Henry Washington?

  Okay. So to praise at 300, you're all in just under 300, but for the people that are listening, on paper, he's all in for less than that because the renovation money was your own money, right? And you put, uh, $50,000 down. So your actual loan balance is lower than 300, but in real dollars, you're in it about 295. So when you say you were able to appraise for enough to do the HELOC, you had equity, you have equity, uh, because of how much money you put down and because you funded the renovation out of your pocket.

• 17:44Speaker 01

  Yeah.

• 17:45Henry Washington?

  All right. So it's on this half acre lot. You said you have started the process of doing an ADU. Did this come up after you bought it? When you realized the potential or did you see the potential for ADU when you purchased it? Cause this was, it looks like 2024. ADUs were just kind of becoming a thing around then. Well, popularity wise.

• 18:06Speaker 01

  Yeah. So it wasn't really the original idea. I was probably listening to bigger pockets and I probably heard something come up about it. And I was like, that's a good idea. And, uh, shortly after my, the city of Wilmington changed the zoning rules that basically almost any lot in Wilmington can build an ADU. So I was like, game on.

• 18:27Henry Washington?

  Where are you in the process of building the ADU?

• 18:30Speaker 01

  We actually just got our permit today.

• 18:32Henry Washington?

  Oh, wow.

• 18:33Speaker 01

  So I have to go tear down a shed and, uh, get the, get the lot opened up for it. So.

• 18:38Henry Washington?

  What are the steps you had to go through to get to essentially the step where you are today? Cause I'm willing to bet there are tons of people listening to this episode who either are interested in buying a house that has a lot where they can put an ADU on it, or probably already have property and their city is now allowing them to build ADUs and are pretty curious about how the process all works. Now, keep in mind, everybody, every city municipality is going to operate a little differently. So just because this is the way Arden's done it, doesn't mean it's going to be the way that you are going to be able to pull it off in your market, but I think this will be still helpful. So you've got the house, it's sitting on a half acre lot, you know, you can do an ADU. Kind of what was your, what was your first step?

• 19:21Speaker 01

  Yeah. So the first step is really one, just determining whether or not you can build, because at least the way Wilmington works, it can't be bigger than half the size of your main structure. So if you're going to build a 300 foot ADU, it's kind of, yeah, you know, nothing to it. Next is quotes. We talked to, I don't know, every general contractor in town who does it. And then some specific ADU companies, now that it's been our thing for about a year, there's a few companies that've opened up and we talked to all of them, got quotes from all of them. And finally found one that we just kind of like meshed with the best, wasn't like necessarily the cheapest, but just seemed like the highest quality for the best price. Next is like their site planning, they have to figure out exactly what they need to do.

• 20:06Speaker 01

  If there's utilities that are going to need to be ran or where that's going to come from. And then kind of from there, it was for us, it was financing, like figuring out exactly how we're going to get the funds, you know, is it going to be cash, is it going to be a HELOC? And then from there, at least, at least in my book, uh, the third party company has really taken it on, uh, to go to the city, get the permits and all of that. So for us, it's now, it's hopefully now it's just choosing the color of the cabinets.

• 20:33Henry Washington?

  Yeah. Yeah. Well, that's the, that's the benefit to hiring a third party to do it. So if you're shopping around for third parties to do it, like finding a contractor who's going to go, you know, fight all the battles with the city and get the permits for you is definitely the way to go. And I like that you got multiple bids for multiple contractors. When you were getting bids, did you already have to know your floor plan or what you wanted to build when you were going to these people? Or did you just go to them and say, hey, I have this lot, I can build an ADU. Like, can you show me what you can do or what I can do here?

• 21:06Speaker 01

  Yeah. So I knew about the rule of ADUs. I looked into it, especially with our other lot. I was looking at what we could build there and found the ADUs. Funny enough, I actually stole one of the ADU guys free plans that was on the show. And took it because it fit almost perfectly in our lot. And we ended up having to not go with it because it was a little more expensive than what we wanted to spend. Um, but I took them that plan and was like, I want something roughly this size. And I know it needs to be like under 600 square feet. And then they would come back with a quote on like exactly that plan or exactly a plan that was the most similar to it on, most of them had like a plan that was close enough.

• 21:44Henry Washington?

  Oh, that's pretty cool, man. Shout out to Derek, man, the ADU guy on Instagram. If you haven't checked out what the ADU guy does, he's such a great resource for being able to, uh, build ADUs. See, this is what he does for a living. He's been on the BiggerPockets podcast, great resource. Sweet, man. Thank you for taking us through that. So now you're at the step where hopefully you can break ground soon, it sounds like. So do you have like a timeline on, on when you expect it to be finished?

• 22:11Speaker 01

  Um, so they said 150 days from permit. So 150 days from today. So.

• 22:16Henry Washington?

  Hey, start the clock.

• 22:17Speaker 01

  Yeah, start it right now.

• 22:19Henry Washington?

  Okay. And, and do you mind sharing kind of the specs? How big of an ADU, one story, two story? And what's the total build going to cost?

• 22:27Speaker 01

  So the total build is going to cost $128,000.

• 22:31Henry Washington?

  That's amazing.

• 22:33Speaker 01

  Yeah. So I think it has to be exactly five 70 feet, uh, but that doesn't include the outside area. So we have two outside patios we're putting front and back. And it's going to be a one bed, one bath.

• 22:44Henry Washington?

  Is it like a studio? Or is it going to be actual bedroom, bathroom, living room?

• 22:47Speaker 01

  Actual bedroom, bathroom, living room. And, uh, right now, one bed, one bath in our area, at least rent from 14, $1500 a month.

• 22:55Henry Washington?

  That's cool.

• 22:56Speaker 01

  Yeah.

• 22:57Henry Washington?

  The next question is the question everybody wants an answer to, which is how the heck did you go about financing this thing? Cause that's the struggle I think people have with building ADUs is there's not like a lot of ADU specific loans out there yet. I think we're going to get some of that in the future as this becomes more popular. But right now you kind of have to figure out how to bootstrap the money to do these builds. Uh, so I'm guessing that's what part of that HELOC was for, you know?

• 23:24Speaker 01

  Yeah. So we ended up getting a HELOC for about $45,000. Um, and then the rest is on us.

• 23:32Speaker 01

  I don't really have any other like magic way of getting money.

• 23:35Henry Washington?

  Yeah. No, that's the thing people need to hear. Like it, it takes capital to do this. And I would encourage anybody who's curious about this is don't just research ADUs, but research any loan programs, grants, help from your cities or municipalities. Like there are options out there to help supplement some of the financing. But if you're building an ADU on a property you already have, like it's going to take some cash, you're going to have to shell out some money to do it because there just aren't a ton of loans out there for this yet.

• 24:05Speaker 01

  We're actually in, uh, talks about getting a roommate again. So we're going right back to our original strategy of like, all right, if we're, if we're here, we gotta have a roommate.

• 24:15Henry Washington?

  Yeah. Okay. And do you have any concept of what the entire property might have praised for after it's all said and done?

• 24:25Speaker 01

  What I've seen is about 70% of the cost of the ADU, uh, seems to be added to the home, which would put us probably roughly at 380, 390, which that's the hard part, but we're realistically going to be making almost a thousand dollars a month in rent just from the ADU.

• 24:43Henry Washington?

  If your goal is to rent it out and cash flow it, you will absolutely be cash flow positive because you're going to be able to get around $1,200 a month on the ADU. Plus you're going to be living in the house. So you're going to be able to have less of a mortgage, especially if you get another roommate. And then if you move out down the road, or when you move out down the road, you rent the house, you rent the ADU and you're, and you're super cash flow positive. So I think that that works. You have to understand real estate's not a short-term game. It's a long-term play, right? And so in the future, your equity is going to continue to build, your debt service will continue to go down. I don't think that that's a bad thing at all.

• 25:23Speaker 01

  Yeah. And we actually have an alternative strategy that if depending on finances, we're actually debating moving into our ADU and renting out the main house because it's more expensive.

• 25:33Henry Washington?

  All right, Arden. Thank you for sharing that story and thank you for being so transparent. I do have a few more questions for you. I want to dive just a little bit into this concept of living frugally and living a little uncomfortably in the short term so that you can truly live the life you want to for the long term, but we're going to do that right after the break.

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• 30:48Henry Washington?

  All right, we are back on the BiggerPockets Podcast. I'm speaking with investor Arden Williams, who has pulled off two house hacks and now a live-in flip and is now taking on an ADU. Before we get out of here on the investment side, I want to talk a little bit about this concept of living frugally. What did living frugally look like for you? What kind of sacrifices did you make in your lifestyle? And then how has making those sacrifices manifested itself in your life now?

• 31:18Speaker 01

  Living frugally has been probably like one of our key strategies. I have a great wife who's also just as frugal as I am and very conscious on money. She's our spreadsheet guru, so she tracks all of our spending, which is amazing. We've had lots of different ways of like just saving a little money. Some of them I don't recommend at all. House hacking is probably actually the least uncomfortable because if you find someone who you actually generally get along with, it's not that bad. It could actually be a lot of fun. Doing a live-in flip is probably the next step into rough. You come in, your kitchen's destroyed and your floor is destroyed and the only thing you can do is work after you get off work. That's not great, but other than that, like we've always been very mindful on what

• 32:03Speaker 01

  we spend, like eating out. And then there for about four years while I was a firefighter, I strictly drove a motorcycle. Rain, shine, snow, sleet.

• 32:12Henry Washington?

  That's intense.

• 32:14Speaker 01

  Yeah.

• 32:14Henry Washington?

  Did you have any like rules of thumb you lived by in terms of like how much you were spending in relation to what you were making? And remind everybody for that's listening, like what were you guys making when you first started this real estate investment journey? And like, what were you spending versus kind of what you were making?

• 32:33Speaker 01

  At the time, when I first started, I was making like $12, $13 an hour as a firefighter. And then my wife was at the time a teaching assistant and making like $12, $13 an hour. And now both of us make roughly about $60,000 a year, so not crazy. We don't really have like a key target that we follow, but we mostly just really focus heavily on not eating out. That's kind of like our biggest, that's our, that's the hardest, that's the hardest.

• 32:57Henry Washington?

  That's how I spend. People ask me what I do. I eat all my money, guys. That's what happens.

• 33:02Speaker 01

  Yes. Yeah. So the big thing is just figuring out what works and the things that you want to spend your money on. And then just trying to limit the things that you're like, I don't actually need this.

• 33:12Henry Washington?

  And I think the other thing that keeps people from living frugally is this fear of like missing out on, you know, the fun parts of life or the things that you enjoy. After living frugally for so long, do you feel like you've missed out on life or missed out on adventures or missed out on experiences?

• 33:32Speaker 01

  No, not at all. So between the time we got our first property to the end of 2024, we had three houses. We ended up renting them all out and we actually got just off the money that we were making, we ended up getting to go travel the world for almost a year.

• 33:48Henry Washington?

  That's really cool. So while both making $60,000 a year?

• 33:53Speaker 01

  No, so we both quit our jobs.

• 33:56Henry Washington?

  Just traveled?

• 33:57Speaker 01

  Yeah.

• 33:57Henry Washington?

  That's, that's super frugal.

• 33:59Speaker 01

  So after traveling across the country, we were like, we want to do something cool every five years. I don't know if that'll stay forever, but it just happened to be right at five years. We ended up being like, okay, this could be our last chance to do a big adventure. And so we just like saved and saved and saved and saved and saved, cut as many expenses as we could. And this was also during the renovations.

• 34:24Speaker 01

  So we're renovating the house, trying to save money because we knew we were going to quit our jobs. And we ended up, yeah, just saving as much as we could. And then the income we were making from just three properties was enough to cover half of our year of travel.

• 34:37Henry Washington?

  I love it, man. I mean, this is, this is why people invest, right? Being a little uncomfortable so that you can invest in real estate allows you to bring in an income that allows you to live the life that you want to live. And I, I love that you are the walking embodiment of that. This has been really cool. Before we get out of here, why don't you give us just a quick recap of what your total portfolio looks like? How many units?

• 35:04Speaker 01

  Yeah. So all we have is three single-family units and we're breaking ground on an ADU, hopefully in the next week or two. And we'll have four units and a piece of dirt.

• 35:16Henry Washington?

  And I like that. And you started in 2021. It's now 2026. So, you know, you didn't have to scale super fast. You've been able to enjoy your life. What are the plans for the future? Are you going to do more real estate deals? Are you going to house hack again? It sounds like you might not do another live-in flip, but.

• 35:33Speaker 01

  Yeah, yeah. We'll see about that one. That one would probably be the hardest to convince my wife of. Yeah. So the plan, definitely to keep doing real estate. I just got my real estate license back in February. So it was mostly for me and my wife in case we wanted to sell something, save us a little money. But I also really enjoy talking to people about this. And, you know, a lot of, a lot of our friends who know us and know what we do have asked us questions about it. So something that we're definitely pushing. And then realistically, like my goal is six to 10 properties. We self-manage everything. So we don't want a huge headache all the time. Anything more than that, I don't really need. I'm just looking to make enough money that I can continue to do the trips I want to do and just try and live a little bit. So.

• 36:17Henry Washington?

  All right. Well, thank you so much, Arden, for sharing your journey, for sharing your experiences. What I love about your story is it is such an achievable path. Anybody can go down this route. You should be proud of what you built. And again, thank you for being open and honest with us and sharing your journey. And I wish you nothing but success as you continue to grow and scale your business.

• 36:39Speaker 01

  Thank you so much. It was great talking to you.

• 36:41Henry Washington?

  And if you're listening and you think you've got a pretty cool story you'd like to share on the BiggerPockets Podcast, then go on over to biggerpockets.com/guest and fill out the form. We could select you. And before you know it, you could be right here on the podcast with Dave Varai, sharing your story for the benefit of our BiggerPockets community. Once again, thank you everyone for listening to the BiggerPockets Podcast. We'll see you on the next episode.

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