How to Achieve Financial Freedom: House Hacking Success Stories

John Harcar (00:01.015)
All right. Hey guys, welcome back to our show. I’m your host, John Harcar. And I’m here today with Jeremy Fay. And what we’re going to talk about, you know, besides his journey and business and real estate, you know, we’re going to, we’re going to talk about how we truly trust and focus on finding value. So everybody can win. Remember guys, at Investor Fuel, we help real estate investors, service providers. I mean, really all real estate entrepreneurs, two to five extra business.

We do that because we can provide the tools, the community, and the resources to grow the business you want to have, which in turn helps live the life that you want to live. So Jeremy, hey man, welcome to our show.

Jeremy Fay (00:38.146)
Yeah, thanks for having me.

John Harcar (00:40.358)
I’m excited to talk about our topic. I think a lot of people look out just for me, not let’s see if we can make a win-win for everybody. I think that’s important. But before we get into all that, why don’t you tell our audience a little bit about you, what got you into business and real estate, and what got you to today?

Jeremy Fay (00:58.176)
I was never supposed to get into real estate like I am now.

I’ll say it like that. My story goes all the way back to when I was this really young, dumb, private in Iraq. I had a guy that saw something in this 20-something year old kid, my platoon sergeant, pulled me aside and started talking to me about this book called Rich Dad Poor Dad, this other book, all these different things, and started talking to me about income producing real estate. And I started out buying a duplex with my VA loan that I house hacked, lived in one side, rented out the other. And it just put me on this path.

And I started taking classes to become a better investor. here’s how ignorant I was about these classes I was taking. I didn’t know that these were the licensing classes to be licensed as a real estate professional, as a realtor.

John Harcar (01:44.335)
You thought you were trying, you thought you were going to learn real estate investing, but it was really to get your real estate license?

Jeremy Fay (01:52.803)
So I just went down to the local community college and if it said real estate, I took the class because I was like, I’m gonna become a better investor because everything that I had known about real estate was because it was, know, come about because of a book or YouTube university, whatever, I was self-taught. And so I’m recognizing the value and okay, let me actually become a little bit more professional with my processes. And I started just taking classes. And again, I didn’t know that I was taking a lot of the classes I was taking were the licensing courses, the pre-licensing courses.

John Harcar (01:56.971)
Okay.

John Harcar (02:21.326)
Mmm.

Jeremy Fay (02:22.788)
to get your real estate license in Texas. And I was running into people and they were saying, when are you gonna get licensed? And I was like, ew, ew, yuck. I was like, I’ve got like 10 units and so I think I’m like a big dog in the real estate investing world. And I’ve got my pinky out and I’m like, realtors work for me. So this whole idea initially, I was completely against it, but in time, the idea just kind of slowly grew on me. And I said, okay, look, I’ll…

John Harcar (02:30.478)
Never! What you talking about?

John Harcar (02:40.152)
Yeah.

Jeremy Fay (02:51.118)
I’ll try it for two years as a realtor. That’s how long your first license is for. My first year in real estate as a realtor, made $100,000. I was like, oh, okay. Well, this is coming along and we’re not bad at it I’m having fun. So I just kept doing it and fast forward five years. Now I’m a broker, I’m forming a team right now. I’ve had…

years behind me. I’ve done a lot of mentorship and coaching so it all happened by accident, my becoming a real estate professional. Along the way of course I continued to do my investments but that’s kind of in a nutshell how it all got going for me.

John Harcar (03:22.318)
That’s awesome. mean, you don’t know how many you kind of took a little bit of my thunder. I like to ask you like how did that the whole real estate come into play and rich dad poor dad and first and foremost, thank you very much for your service. So you bought a first duplex. Were you still in the military when you bought your first duplex? Okay. Okay.

Jeremy Fay (03:35.482)
thank you.

Jeremy Fay (03:40.385)
had just left the army at that point. I don’t know if you know the stories about what happens to a lot of soldiers when they go downrange and they are married, they tend to come back and they’re no longer married. And that’s kind of what happened to me. So I was not in planning on purchasing any property while I was going through a really sloppy divorce. I waited until I cleaned all that up. By the time I had done with that, I was out of the army and I was able to move forward as a civilian and still use my VA loan, of course.

John Harcar (03:58.082)
Mm-hmm.

John Harcar (04:07.768)
So how did you find the duplex? mean, how did you purchase the duplex? mean, you just mentioned user VA loan.

Jeremy Fay (04:15.02)
Yeah, I used my VA loan and it was just one of those things. I don’t even remember how I met the realtor that I was working with at the time. It probably started with like a Google search or something, you know? And I actually tied in with that realtor and she became a broker and she was my person for a very long time. I purchased a lot properties with her until I became licensed myself. But yeah, it was literally just one of those things where it was, that seed was planted in my head from years ago.

platoon sergeant and I just said I’m gonna do this and I had a lot of opportunity to buy single-family properties of course my wife got the new wife the good wife she was she was she was again you gotta get that first bad one out the way you know

John Harcar (04:59.36)
Yep, yep, trial and error, right?

Jeremy Fay (05:01.998)
She wanted a single family and I, you know, there was, so there was, you know, some challenges there and helping her to maybe see the vision that I had for our future in the way of using real estate as a vehicle to build wealth and passive income. At the end of the day, she trusted me and she said, all right, look, you know what you’re doing, let’s do it. So that seed had been planted and stayed with me. And so I knew I was going to purchase multifamily and house hack it. And I felt like that was a good like first step. That was a platform to springboard off.

John Harcar (05:27.662)
I love it. I love it. Just for folks that maybe are on here and aren’t familiar, why you explain the house hack.

Jeremy Fay (05:35.149)
House hacking, yeah, I you could house hack a one.

single-family residence just by getting roommates live in one bedroom and then rent out the other bedrooms in your home and you can do that with a multi-family of course is what I did I lived in one side running out the other the idea here is that it offsets your overhead your expenses I actually at the time that I purchased this my first duplex I went from a two-bedroom that I was renting to a three-bedroom that I was living in and because I had the rental income coming in from the other side

of my property, I was able to offset my total housing expenses so that I was actually paying less on monthly basis than I was when I was renting a property. Now, from there, the challenge is just pretending like that money isn’t there. You just scroll that away, have good personal finance 101, and shove that money into somewhere where you can’t easily access it and use it as capital for the next deal.

John Harcar (06:34.87)
What were some of the struggles as you started buying houses? mean, maybe even some struggles with this house hack, being that landlord, especially living next door to your tenant.

Jeremy Fay (06:47.286)
Yeah, on that note, we tried to keep it a secret because I had a professional property manager. I was not self managing anything at that time. do now. Currently, I self manage 89 units, but at the time, I didn’t want to have anything to do with management and.

John Harcar (06:55.959)
Okay, all right.

Jeremy Fay (07:05.558)
We tried to kind of keep it a secret, but of course, as owners, we saw things that the tenants were doing that we didn’t like. They were causing damage and there was this dog suddenly that wasn’t supposed to be there. And I would quietly call my property manager and it became apparent that the neighbor was snitching myself, that I was the, know.

John Harcar (07:24.104)
Right, yeah, yeah, the neighbor was saying something.

Jeremy Fay (07:26.4)
And so then the kind of the cat was out of the bag or there were other times where I would, you know, try to just, you know, form daily interactions with the neighbors slash tenant that didn’t know that I was the owner and they would start talking crap about the owner or something. And I would learn that things were broken.

John Harcar (07:41.666)
Wait, wait, really? you had the tenant talk crap about you to you?

Jeremy Fay (07:46.669)
they didn’t like some of the property management practices and, you know, and by, you know, they, of course they were just like, the owner, the owner, the owner, or other times things would happen and I would learn about things that were broken. And I would say, did you let them know? yeah, let them know. And so now I’m pissed off as the owner, as a property manager, you know, so it was, it was a disaster and I was very happy to finally move entirely away and now house hacking, I house hacked several properties and it was a challenge.

John Harcar (08:03.222)
at the property management.

Jeremy Fay (08:16.752)
Finally the day that I finally got a single-family residence and moved away from it that was nice because I didn’t have to deal with You know those heartaches anymore for sure

John Harcar (08:23.662)
Sure, sure, no, no, there’s probably lot of lessons learned there. So what does your business look like now? I I you mentioned you manage or you own 80 doors, 89 doors?

Jeremy Fay (08:35.482)
Yes, and it’s really interesting that that’s all that’s a whole interesting story that we not so segue to maybe get into the these 89 doors were part of a portfolio that belonged entirely to a client of mine, somebody that I worked with. He’s an investor and I just worked with him as a real estate professional and I

Probably helped him with about 60 ish or more of those doors help represented him as a buyer’s agent He asked me several times if I would manage those properties and I said no never I never wanted to get into property management I remember at the time I have professional property management managing my own properties and the idea of property management was just something I never wanted to get into

And then whenever I became a broker, he said, you’re a broker now. Now you can start your own brokerage, start your own property management company. You’re going to manage my properties, right? And I said, no, no, I’m not going to do that. He saw value in me and he saw something that he really liked. And I appreciated that for sure. So finally he came to me and this was probably about a year or so ago. And he said, Jeremy, you’re going to manage my properties. And I was like, we’ve been through this so many times, man.

John Harcar (09:32.12)
He’s trying to you, man, he’s trying.

Jeremy Fay (09:48.723)
And he explained to me that he was leaving Texas. He had been accepted to Columbia Business School, which, you when Columbia calls, you go. And he said, I need somebody to manage these properties. He said, look, I’ve been reading and.

John Harcar (09:56.13)
Yeah, for sure.

Jeremy Fay (10:01.058)
you need to have your license to manage other people’s property, but you don’t need to use your license to manage your own. I said, that’s correct. He said, okay, so you’re gonna manage my properties. I said, I’m not gonna do this. He said, you don’t understand what I’m saying to you. And he kind of broke it down and he said, look, I wanna give you an ownership interest in my entire portfolio.

with zero capital buy-in just because I want you and I trust you and your services that you bring in your professionalism. And so I said, well, I might do property management after all. So it turns out I’m not a man of principle. can be bought. Right, right. But that’s a really good story to tell because what

John Harcar (10:29.934)
You know what? I’ll second thought. That’s an awesome, awesome deal, dude.

All right, you hadn’t yet hello.

Jeremy Fay (10:48.874)
It communicates and for a long time, whenever I got into doing the house hacking, the problem that I ran into was not in finding deals. I saw deals everywhere, but it was in gaining the capital that I needed to be able to put the deals together that I saw and that I wanted to do.

This was a really interesting situation because somebody saw something in me. They saw that value that I was able to consistently bring over and over and over again. And I was able to receive an ownership interest in a substantially sized portfolio that now I’m connected to forever and at $0 buy-in. So if you just work to bring value, value will come to you.

John Harcar (11:29.443)
Well,

I was gonna say that’s the story. That’s the moral of the story and it kind of goes I just finished reading out too long ago the book the go-giver Provide more in value than you receive back I mean if you do that it will come and you know when folks come to our mastermind I say hey be a be a generous expert give give everything you you know and that will help you come back so

Jeremy Fay (11:39.406)
Mm-hmm.

Yes.

John Harcar (11:55.853)
What, are you doing, are you holding doors? Are you flipping? Are you, we know, I know we talked a little bit about this more, but just so folks that might be in the area and maybe want to work with you, what are you, what are you doing right now? Are you doing more on the real estate side or realtor side or investment side?

Jeremy Fay (12:08.946)
I would say it’s 50-50 at this point. I I probably dedicate four or five hours a day to each of those activities. I…

have not done any intentional flipping before the flipping that I’ve done. So I did for a long time, did burring into STR, short terminals Airbnb properties. would jokingly, I’m sure I didn’t coin the term, but I called it burster burring into STR. the only, right, yeah, I should write a book, the burster, you know? So the only flips that I’ve done were the,

John Harcar (12:36.43)
That would work. The burster.

Jeremy Fay (12:45.858)
the bird deal has gone wrong. So I like to buy and hold. I like long-term rentals. Like I said, I’ve done STRs. Those things are so high intensity, high maintenance.

John Harcar (12:58.094)
My maintenance especially.

Jeremy Fay (12:59.266)
They are so much and I felt like I was always beholden to that guess to bend over backwards. I did some things that I would never do even for my own clients as a real estate broker because I didn’t want, because if you get a three-star review with an Airbnb property, you’re done. Hang it up, yeah. And basically I was…

you know, borderline being extorted because people would say, I found one little thing. It was outside like a cigarette butt or something. said, well, you know, we have a smoking non-smoking policy. They probably went outside the previous guest and threw their cigarette butt outside and our cleaner missed one cigarette, but outside. they said things like, don’t worry. I took care of it. If you just want to knock 50 % off my cleaning charge. And I can’t say no to that because I know I’m going to get three starts. So that was, that was something I kind of bowed out of. And there were some, some wins there and some losses, but I’m very

John Harcar (13:48.841)
Mm-hmm.

Jeremy Fay (13:49.243)
happy not to do short-term rentals anymore. I prefer the long-term rentals. There is maintenance, there always are things that take from your time every single day, but I couldn’t imagine having 89 short-term rentals. My god, man. I would need a whole team.

John Harcar (14:06.434)
That, well, 89 short-term rentals would be a headache and a nightmare alone in itself. Do you see any other regulation coming down on short-term stuff? You know, or, you know, or anything like that?

Jeremy Fay (14:09.486)
Thank Director.

Jeremy Fay (14:17.544)
Most that I’m seeing are being driven at the municipal level, at the city level, and it all kind of depends on your area. For example, here in Kaleen, a couple years ago, they introduced short-term rental registration where you have to go and register. You pay, of course, a tax. They want to get their money. But I know people that do STRs in Hawaii, for example, and their STR…

regulations are a lot more stringent because of the nature of those properties. They have had recently a very high number of absentee landlords as people are just short-term renter, know, all of their VRBL, Airbnb, all of their properties out there. And it does have an impact on that local community. So I can understand why government would want to do that. And of course they’re missing out on their occupancy tax that a hotel would normally pay.

But most of the regulation that I’ve seen concerning short-term rentals is not being driven at a federal or state level. It’s all down at the local city.

John Harcar (15:21.486)
Where are you taking your business? What are your goals? Where you want to grow to? What’s your plan? Anything big on the horizon?

Jeremy Fay (15:29.912)
There’s always things that I’m cooking. I’m always hesitant to say what it is because then if it doesn’t come to fruition, then I look like a jerk, you know? There are a couple things I’m working on. have…

I bought a large investment property that I’m looking to add to this 89 units. It’s around 100 units or more that I see a lot of value in. The current owner is struggling with their occupancy. They’re at about 65 % occupancy and I know that they’re bordering on having some real financial difficulties. of course, where other people see problems, I see opportunity and I’ve got good practices and good processes in so far as how I market. Obviously, being a realtor, I can market

well so I have applied all of that to being a property owner and a property manager and my occupancy rating is north of 90 % so whenever I see those types of things I go hmm I think I could fix this.

John Harcar (16:26.318)
So okay, and let’s talk about that real fast. What are the things you do? mean, what do you do to go raise it from 65 to 90?

Jeremy Fay (16:34.616)
There are a lot of things. I use a lot of automation and integration. So for example, I am running Facebook and Google ads that are, you know, of course, tied in with targeted words that work to, you know, the little shadow ads that follow people around. Like if you ever say the word toast or Google the word toast, then suddenly you have toaster ads following you around for the next month. I use those sticky ads on Facebook, on Google. And then I have that tied in.

with a CRM system that through some integrations with Zapier so that as soon as they hit the button and say I’m interested, they’re getting an auto reply that comes from me. And the way that it’s worded, and so much of this is about language. If you ask a person a question, they’re gonna feel compelled to respond. So I’m playing on human psychology here. I ask them, when are you looking to move? Well, they’re more than likely gonna give me some information. When I get that reply back, I am very quickly, actively working on follow-up.

So kind of I’m taking the marketing that I’ve learned as a realtor kind of that lead to call time and I’m applying that directly to how I’m sourcing leads for tenants for the property management side of things. So that’s something that I have tied in that has been very effective. A lot of times, especially people and my properties that I have in this portfolio are C grade. These are not, you your top of the line. So you have to consider the clientele.

that are looking for tenants, that are looking for occupancy, looking for a rental like that, they’re gonna be the type that need a place now. So kind of the lead to call time, the flash to bang, so to speak, if you can very quickly satisfy that, give people that dopamine hit, then they’re gonna wanna work with you. And also, I’m pretty good in person. I can just set the appointment, and again, this goes back to being a realtor, number one, set the appointment.

the appointment, if they struggle with that, use a choice of two positives, okay, better weekend or weekday, okay, better morning or afternoon and kind of lead them into it. So, all of that coming together is kind of creates the synergy that enabled me to move properties from low vacancy, or excuse me, high vacancy to low vacancy and really help with the performance there. So yeah, there’s not one silver bullet. It takes putting it all together and that’s what’s hard.

John Harcar (18:50.242)
I your mindset.

John Harcar (18:54.627)
Yeah.

Jeremy Fay (18:55.578)
Doing the thing is not difficult. It’s doing it in a manner that is synchronized and harmonious and is done in a way. Yep. Because I’ve got hundreds of hours into building the systems, hundreds, staying up till 2 a.m. struggling with Zapier technical errors and just my head on the keyboard trying to figure it out.

John Harcar (19:03.918)
systemized and you know get it all you know all get the processes down to get everything just dialed

Yep.

John Harcar (19:19.534)
Yeah, well, but I think that too is maybe some of the reason, you know, why people feel. They don’t they don’t don’t they don’t put the time into developing that the suck. Yes, it sucks. No one likes to do it. It’s not sexy. But if you build those type of processes and you know it’s going to run smoother, you can like you can delegate, know, you delegate some of the responsibilities if you have it.

Jeremy Fay (19:25.326)
You gotta grind it out.

Jeremy Fay (19:41.453)
yeah, and I have. I’ve got, for example, I’ve got systems set up right now that the maintenance requests go directly to my maintenance guy. I just do a 30 minute sync with him once a week so I can yell at him in case work orders are getting too old. And the same thing, I’ve got an admin that works 20 hours a week and she does, I call her the rent wrangler, she does the renewals. And so she grabs about 90 % of the problems and then the things that come to me are the big, big real problems that I can fix. So I feel like I’ve got good systems there that haven’t, if it wasn’t for that, I wouldn’t be able to

John Harcar (20:04.834)
Yeah, right.

Jeremy Fay (20:11.456)
both a real estate broker and the manager that I am now.

John Harcar (20:12.622)
Yeah, I was talking to a lady earlier that she does, she’s a luxury broker, but she also started to do like resort residences. And that’s the thing we talked about. She’s like, I’m afraid to do one because it’ll take her from the other Michael. You got to put down processes. Your systems and processes will be able to take all this time over here and move some over here slowly. It’ll just start going up. So.

What do you think is we’re getting close on time here, but what do you think if you look back at all your experience or are there a couple things that are your keys to success? What got you to where you’re at today?

Jeremy Fay (20:45.24)
failure.

the nasty stuff that nobody wants to talk about. They never put it on their social media. Yeah, the sucky stuff. I made a joke and it’s kind of a thing that I often say to myself and I say to other people as well. There was a situation, a business that failed and I got a million dollar lesson at an 80 % discount.

You know, it cost me $200,000 by the time it was all said and done. It hurt, it sucked, it’s not fun. I hate it. It kept me up at night. It probably took years off my life. I would do it again though, as bad as it was because it was so good to me. It was so good for me. Man, but it sucks when you’re going through it. And that’s just what

John Harcar (21:13.87)
Mm. Mm.

John Harcar (21:26.584)
such a learning experience.

it’s horrible.

Jeremy Fay (21:31.503)
Like, you know, don’t be afraid to embrace that risk. You know, be that risk taker. You know, yes, work to mitigate risk, work to, you know, try to move from the unknown to the known.

or quantifiable risk to figure out what it is, how you can account for it and build that into your assumptions. But at the end of the day, sometimes you just got to risk it for the biscuit. And if you fail, you fail, that’s okay. Lose your money, go bankrupt, start again. They can never take the knowledge from me. You got all of that. So I got that million dollar lesson. Thankfully it didn’t destroy me. It hurt. It took me down a peg or two for sure. But.

John Harcar (22:00.825)
Mm-hmm.

Been there, that, yep.

Jeremy Fay (22:05.075)
But that’s what it is. I’ve never won. I’ve never had the perfect deal and said, man, I learned so much from that, you know?

John Harcar (22:11.278)
If you ever find a successful business operator that’s never failed, I’m gonna show you a liar. That’s it. I failure, first attempt at learning. Before we go and sign off, any other advice or any advice you wanna give to someone maybe looking to get into the game, whether it’s being a realtor, being an investor, buying hold, whatever.

Jeremy Fay (22:19.512)
Mm-hmm. Yep.

Jeremy Fay (22:34.83)
I would just simply say I have seen investors and realtors, professionals quit right before they hit that threshold. for years I used the metaphor of 212 degrees of boiling point of water. learned later that somebody already wrote a book and I was really upset by that because it could have been my book. But I’ve seen people get, they push, you know, for six months or a year, who knows how, whatever, however long it’s going to take you, but they stop just shy.

of 212 degrees and it’s like, man, if you had just, you know, pushed over or maybe they, what they tend to do is they hold a little something back. They keep their day job because they’re scared of failure when they exactly that energy that is needed, that they’re holding back, they need to propel them over. you know, I guess, I guess the more the message here is to just be patient with the beginning of it, you know, model your processes after people that have been successful and gone there before you, and then just stay committed to those

processes even when you’re not seeing anything there are things working in the background and under the surface that you don’t understand yet but in hindsight you’re gonna go okay I was cooking it was working

John Harcar (23:41.646)
Yep, yep, I love it. That’s some killer advice. If there’s any folks that want to get a hold of you, they’re listening to this, they may be in your area, they just want to talk to you, something resonated with what you said, how do they get in touch with you? What’s the best way?

Jeremy Fay (23:55.276)
The easiest way for anybody, if you just Google my name, you’re gonna find me all over the front page of Google. That gives a lot of legitimacy to me as a real estate professional, Jeremy Fay, F-A-Y, and you’ll find my number all over that, all my social media is there. That’s the best way to make it easy for people so that nobody has to remember a number. Just remember the name and Google me.

John Harcar (24:16.193)
There we go. Hey, we’ll put all that all the stuff you sent me down in the in the show notes guys I hope you enjoyed the show Jeremy. Thank you for coming on and dropping some good stuff, man I really appreciate that. I hope everybody up home took some good notes. I hope you enjoyed this show and we will see you on the next one Cheers

Jeremy Fay (24:31.993)
Thank you, it was a pleasure.