How Ryan Spath Uses House Hacking to Help First-Time Investors Build Wealth in Boise

Ryan Spath (00:00)
One of my favorite things to do is work with first time investors and teach them the house hacking strategy. I think there’s a misunderstanding for younger people when they think of purchasing a home, especially in my market, the median price is right around 500K and conventional thinking.

has these people under the impression that they need to save up a hundred grand to buy a house when there’s another alternative.

Michelle Kesil (01:59)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Ryan Spath, who is a licensed realtor as well as an investor in the Boise area. So excited to have

Ryan Spath (02:13)
Okay.

Michelle Kesil (02:18)
here today, Ryan.

Ryan Spath (02:19)
I’m excited to be here. Thanks for having me.

Michelle Kesil (02:22)
Yeah, of course. So let’s dive in. First off, those not familiar with you and your work yet, can you share what your main focus is?

Ryan Spath (02:31)
Yeah, my focus is just anyone that’s looking to build wealth or real estate here in the Treasure Valley.

One of my favorite things to do is work with first time investors and teach them the house hacking strategy. I think there’s a misunderstanding for younger people when they think of purchasing a home, especially in my market, the median price is right around 500K and conventional thinking.

has these people under the impression that they need to save up a hundred grand to buy a house when there’s another alternative.

We can use FHA first time homebuyer programs, three and half percent down to buy a property such as like a duplex. And it’s a much lower barrier to entry. Not only does the tenant help pay for the mortgage, but the rent will also help people qualify to get into property sooner if their income isn’t as strong.

Another thing with this market, it’s a big appreciation market with all the growth that’s taking place, especially Micron, everyone’s hearing about on a national level. There’s just a lot of inbound migration. There’s a lot of people moving here for jobs. Our annual job growth last year alone was 1.1 % for the area where the nation was only 0.4%. And if anyone knows investing, we know that we need

migration in and strong job growth to be able to pay rent and have the properties go up.

Michelle Kesil (04:05)
Yeah, absolutely. And so how did you learn about real estate and investing strategies?

Ryan Spath (04:13)
Yeah, great question. ⁓ Many moons ago, I think I read a book, Rich Dad Poor Dad. I was in the business space prior to being an agent and I just, everything that I read, all the people that had any sorts of wealth, seemed that a good portion of that was in real estate. ⁓ So I always had an interest in getting into it and my personal story began

I bought my first property in Portland, Oregon, actually in the metropolitan area way back in 2013. I moved from Florida to Portland for work and I was looking at properties. met a Keller Williams agent and we were looking at existing housing stock and it made more sense just to build a new property, a new construction property. It took about 10 months to finish the project and

The plan was to live in Portland for about a decade. And as many people’s lives do, mine threw me a curve ball and I lived in the property for about eight or 10 months and ended up relocating here to the Boise area. And I contacted my agent and she gave me the skills necessary to turn it into a rental property. It was sort of a a pivotal moment for me because like many people,

I don’t think we want to be landlords, right? We all have the, or hear the horror stories or someone’s told us that aunt Susan was a landlord and the tenant destroyed her property or she has to fix toilets at night. ⁓ that wasn’t my case at all. So fortunately with this KW agents advice, I got teed up with a good property manager and.

we turned it into a rental. It was nothing great at first. I think I might’ve actually been losing $25 a month or so after paying the management, but it was a new construction. So fortunately I didn’t have any major expenses or anything like that that sprung up.

Michelle Kesil (07:01)
Awesome. what did your investing journey continue to look like? Are there specific strategies that you’ve used and that you felt worked for you?

Ryan Spath (07:13)
Yeah, good question. So once I was in Boise, I was living with a friend and I was looking for other housing and I reached out to my local bank and I told them my scenario, I gave them all my financials and they weren’t going to let me qualify for another conventional loan. At that point in my life, I didn’t know what a mortgage broker was. just

I went to ABC Bank and I didn’t fit the box that they put me in, so they told me no. And unfortunately, I didn’t ask any other questions. Well, that turned out to work for my advantage. I was calling on properties and I told a realtor in the Boise area what was going on. So they teed me up to a property in Garden City. And this is back in 2014, which if anyone’s familiar with the Treasure Valley,

Garden City 12 years ago was nothing like it is now. It was very pumpkin patch. Still kind of is. There’s a lot of development taking place there. There’s a lot of trailers, but it’s positioned in an amazing place. It’s pretty central to the Valley. ⁓ runs, you have quick freeway access and it runs along the Boise River. So I was able to secure this asset under owner carry terms. ⁓ You know, again, it was 12 years ago. So the acquisition price was like 160 grand.

think my mortgage was only like $900. I ended up moving someone in to rent one of the rooms for about 450. So I was house hacking my first town home. This went on maybe about a year and then I met my now wife. So I gave my tenant the boot and I moved my wife in and I was actually charging her rent before we were married. And then

Once we got engaged and everything, she became pregnant with our now first child. And we decided that we wanted to, we wanted to buy a house. So I remembered that I had this property in Portland, the first property that I bought back in 2013. And now it is 2017. So a few years had gone by and the values in the Portland metropolitan area had gone up quite a bit. So I called my Keller Williams agent back, name’s Sharon Bloedig, shout out to Sharon.

and I tell her what’s going on in my life. She of course congratulates me and I tell her that we want to sell the property and buy our forever home here in the Boise area. She informs me that because it’s been a rental for a couple years, if I were to sell it that I would have to pay capital gains. And she asked me if I’d ever heard of a 1031 exchange, which at this point I had not. So she explains the basics to me, connects me to an intermediary.

and I bought into the idea of just building wealth the real estate, right? We sell the property, this is in 2017,

I net like 125 grand, which pre-COVID, $100,000 was a whole heck of a lot of money. It is to me now still, but especially pre-COVID, it was a lot. So we exchanged that property and we buy a couple more properties here in the valley.

And it was kind of an aha moment because I wasn’t making tons of money. But the upside of this, I didn’t put a lot of money down in this first property and to have a six figure profit, pay no taxes on it, and then it’s changed into two more properties. A light bulb kind of went off in my head and I was still in a different space. was still working. I had businesses. So I didn’t have the time yet to go full in and just

just dig in, but that was the light bulb that went off. So we exchanged the property. We’re making a couple hundred bucks per door. It’s almost, you know, we’re like.

We’re living, I think we’re making like $500 and again, my mortgage was like 900 to the townhouse. So it’s only costing us like 400 bucks a month. And that was kind of the pivot that made me really start writing goals down. And based on this one move, my goal originally was to just buy 10 single family properties. I figured if we could make $500 a month, $5,000 a year with our portfolio.

Based on our living expenses then, thought it would take a whole lot of stress off of us financially. And that was kind of the original goal and the pursuit and the things that my wife and I wanted to achieve after doing that first 1031 exchange.

Michelle Kesil (12:20)
Yeah, amazing. And so what does that look like? Now? Are you continuing to invest? Are you just having like these longer term buy and hold properties?

Ryan Spath (12:32)
Yeah, great question, Michelle. So that kind of sprung board everything. ⁓ My wife and I, at this point, we weren’t married. We were just engaged. And instead of doing a conventional wedding and spending tens of thousands of dollars and paying for a party for people, we decided to elope. And we were scrappy at this point of life. Like my wife was working, I’m working. We lived on the Dave Ramsey envelope system. It was a pain, but we literally had, we’re saving this much, we’re spending this much.

all the envelopes, all the things, and we bought a single family home. So instead of having this big wedding and spending tens of thousands, we buy our next property. And now with the rent we’re making from the townhouse and the two other properties we purchased, we’re pretty much living like all the cash flows covering the housing expense of the property that we bought instead of going.

on a or instead of having a big wedding and taking like a gigantic ⁓ honey moon. So we do this and now we’re really pumped up because we’re living for free. You know, we’re saving an extra thousand bucks a month and we’re just we’re really we’re diving in. We’re doubling down. ⁓ We buy a new construction property a little bit on the outskirts of town and.

Gosh, this was 2019 in CUNA, Idaho, which again, we got ahead of the curve there. CUNA now, like the values have doubled at least since we bought the property. And we live there and it’s a lot further from town, right? Like it totally changed our lifestyle. We liked to ski, we liked to mountain bike and stuff. And now we’re good at 45 minute drive from all those activities that we like to do. We also have two kids.

And my mother-in-law was a little bit further away, so we were further away from support. So we moved back to Boise. We moved into one of the homes that we bought during the 1031 exchange. And everything’s going great. Life is good. ⁓ The businesses are going pretty good. And then ⁓ COVID happens. And I had a business here in the Boise Town Square Mall.

And the mall just after having this business in the space for over a decade, they just chose not to renew me. And this represented over a third of my income. So now that I’m married, I have a couple of kids.

I was very nervous because we did have properties. We were making some money, but we didn’t have the 10 yet. It wasn’t it wasn’t enough to totally cover our lifestyle. And as everyone knows, when COVID happened, all of our properties, I mean, it just.

everything pretty much doubled over the span of a couple years. So we just took a chance, we better ourselves along the way. I had been just reading books and really educating myself on all the different strategies, active in all the blogs, just going to meetups, all the things. So we just took a leap of faith and we extracted equity out of all of our properties and we decided to

move across the country to Florida. It wasn’t just a random town. It’s a place that my family lives. So we had support there. I grew up there. went to high school there. I was very familiar with the market. And another reason was this market, the barrier of entry, the price point was a lot lower than where we lived. So that was the plan is just to move and try to get properties and improve our cashflow position. And that’s what we did. So we moved there. We bought a house.

⁓ I did a burr. found out that I don’t like swinging the hammer at all. did all the work. It was absolutely, it was amazing because of the outcome. But when I was living in it, going to Home Depot three and four times a day, driving 20 miles around trip. And there were a couple of days in the show where I literally like was questioning what I was doing because it was, it was absolutely tough and terrifying. I I’ve never done anything that big in my life. ⁓

But we bought the property, we acquired it at a great price. We still own the asset today and we make a lot of cashflow from it. While we were there, we moved again. We are gonna try to do an Airbnb. It’s sort of like a vacation town that we live on along the river. it just, that one ended up not working. We actually had to dispose that one. We had to sell it to come back to Idaho. We bought a couple more duplexes while we were there.

We decided it wasn’t a place that we wanted to raise our families or our family, our daughters. And we moved back to Idaho and now the free cash flow we make from our properties more than pays for our lifestyle. And it is, it’s everything that it can be. It’s just, it’s taken a long time. My wife and I, we’ve been married for nine amazing years. We have two beautiful daughters. We’ve moved seven times. ⁓ It hasn’t been easy, but it’s been in the pursuit of this journey.

And we moved back to Idaho. That’s when I got my real estate license. And I’ve ever since been just trying to help people do what I’ve done.

Michelle Kesil (18:34)
Yeah, amazing that you were able to just go out there and figure it out and yeah, now support others on that journey.

Ryan Spath (18:42)
Yeah, it was tough. not gonna lie. Every time we moved, it’s been scrappy and it gets harder as our children have gotten older with schools and things like that to consider,

Michelle Kesil (18:46)
Sure.

Yeah, absolutely. And so are you continuing to scale your investing business or are you just focusing on being an agent?

Ryan Spath (19:07)
Yeah, so we made one more accusation this last October ⁓ when we moved back from Florida, we moved to one of our homes in Northwest Boise and I started coming out to Star Idaho just to help clients and we really noticed that there was opportunity here. ⁓ There’s a lot of growth here. It’s an upcoming town. We think it’s gonna do what CUNY did for us when we bought back in

Gosh, when was that? 2019. So we just went for it again. We moved again ourselves. It’s been a little bit harder because we have kids, but we figured we would move here as part of our strategy. And the plan for us is to kind of sit tight here for a couple of years. And I really just want to focus on helping other individuals. That’s what I did my whole last year. I did help.

you know, normal retail buyers purchase homes and things of that nature. But I was fortunate enough to help people invest in small multi-family projects, helped a few people get into the market with house hacking, helped someone buy some properties that they Airbnb. So we will still invest, but right now my primary objective is just, I just want to serve others. I just want to help other people do what we’ve been able to do.

Michelle Kesil (20:34)
Yeah, amazing. And so are you primarily helping like first time investors or first time home buyers or a little bit of both?

Ryan Spath (20:45)
Yeah, great question. It’s been a little bit of both. market, the barrier of entry is so high that for newer investors, the easiest way to get into the market is house hacking. I’ve had the amazing opportunity to help several people do that. And I think it’s just a great way for people to A, get into the market, to kind of cut their teeth as being a landlord and learn how to invest. I’ve also helped people just, you know, normal people that want to invest in.

Multifamily projects here ⁓ just put 25 % down and we’ve identified cashflow properties that they make a nominal return on. ⁓ So pretty much everywhere in between. And there’s a lot of people that live out of state that just they have higher income. And I’ve been in conversation with several of them lately where they want to just either purchase properties, conventionally putting 25 % down or just write checks for properties via cash.

They want the upside and the stability of the cashflow. So it’s been, it’s been a great mix of everything, you know, and even when I start with a first time home buyer, those are my favorites because they don’t think they know everything yet. And you can educate them and show them how to position the property for their first one. They can turn into their first rental when they go from one to two to three to four properties instead of if you’re approved to buy a $600,000 house.

don’t max out your budget, let’s maybe shop and get something that’s 450, save a little bit of money, have a lower payment. So when we do go to make that jump to the next property, we at least have one asset under our belt so we can start kind of growing that way.

Michelle Kesil (22:30)
Yeah, absolutely. That’s amazing that you’re able to help people with your knowledge.

Ryan Spath (22:35)
Yeah, it’s been fun.

Michelle Kesil (22:38)
Awesome. Well, before we wrap up here, if someone wants to reach out, connect, and learn more about what you’re up to, where can people find you and connect with you?

Ryan Spath (22:49)
Yeah, absolutely. They can find me on Instagram. It’s RyanSpathRealEstate. They can give me a call. 208-600-2814. Shoot me an email, shoot me a text. My email is Ryan Spath, R-Y-A-N-S-P-A-T-H @ kw.com.

Michelle Kesil (23:09)
Okay, perfect. Well, I appreciate your time and your story. Thank you for being here.

Ryan Spath (23:14)
Yeah, thank you so much.

Michelle Kesil (23:16)
And for those tuning into the show, if you got value, make sure you have subscribed. We’ve got more conversations with operators like Ryan who are building real businesses and we’ll see you all on our next episode.