How One Overlooked Rental Property Turned My 100-Hour Workweeks Into Passive Cashflow Mastery—Here’s the Untold Story

Ashley:
Most people wouldn’t move into a tiny house in their own backyard. Today’s guest did exactly that at 26 years old, so he could split his house into two units, rent both of them out, and have his tenants cover his mortgage and most of his bills. He did the renovations himself, went through an eviction, rented to a family member, and came out the other side with a completely honest take on what landlording actually looks like when you’re in the middle of it.

Tony:
Elijah Ray bought his first property in Portland, Oregon in 2023. He converted a single family home into two rentable units, lived in a tiny house he parked in the backyard, and spent two years learning what real estate really costs you, not just financially, but personally.

Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. With that, let’s give a big warm welcome to Elijah. Elijah, thanks for joining us on the Rookie Podcast today.

Elijah:
Hey, hey. Thanks for having me on, guys.

Ashley:
So I want you to take us back to 2023. You were 26 years old. You’d been learning from BiggerPockets, and what finally pushed you to stop learning and to actually buy something?

Elijah:
I was ready. I basically, I knew I was ready when I knew I didn’t want to keep on renting, and I just wanted to live in my dream basically. So I just kind of thought, I was like, you know what? Am I okay with working in a bunch? Am I okay with working really hard and getting to this goal? And I mean, turns out I was. I ended up just applying to a bunch of jobs and just grabbing two of them and working a hundred hours a week. And basically just a second that I had two years of paychecks of both jobs at the same time. Yeah, basically just when I got to the point of having my jobs, both jobs at the same time for two years, that’s when I knew it was time to jump in and start looking. And I found my real estate agent, and luckily I got the house that I have now.
Although I had to put in a lot of offers and see a lot of kind of crusty homes before I saw mine. It was a process, but definitely worth it.

Tony:
Elijah, we’ll talk about the house you ended up finding in just a moment, but I just want to make sure I didn’t misunderstand what you said or mishear what you said. You said you were working 100 hours a week?

Elijah:
Yes. I was sleeping at my Amazon job. So basically I worked a night shift security job. And then during the daytime I would work an Amazon job. On my breaks, every second I could, I would take a nap on the Amazon van shelves and stuff. It was pretty crazy. But yeah, I was working a hundred hours a week. It was hard, had no social life. I was eating rice every single day. It was actually pretty hard, but it was worth it. I knew my money was stacking up. And honestly, it wasn’t really the money. It was just I knew I needed my paychecks to say a certain number to get a certain price of a house. So I did the calculation and stuff from the stuff that I learned. So yeah, it was tough.

Tony:
Elijah, let me ask, man, because I think a lot of people, they want things in life. All of us want for something, but very few people are willing to do the required amount of work to actually make that happen. And when I hear working two jobs, sleeping on my lunch break, that’s someone who is willing to do the work. What was it that gave you not only the motivation, because I think a lot of people can find that initial motivation, but what was it that gave you the ability to stay disciplined and consistent long enough to actually get to the goal? Because I would imagine there had to be days when you’re like, “Man, is this even worth it? What am I doing?” How did you push through those moments to actually achieve the goal of getting the capital set aside?

Elijah:
I would say the hardest moments were when you wake up from a nap and you’re still at work. So I definitely know that feeling of, okay, when the motivation is gone, other things have to push in. The thing that pushed me, which is kind of hard to say, but was seeing my friends and family around me not achieving the goals that they set and also living lives that were kind of mediocre. You know what I mean? Nobody owned their own home, which is fine. Some people don’t have a goal of owning a home, but they don’t own their own home. They’re working a job they don’t necessarily like. My goal was to buy my house so I can rent out some of it so I don’t have to work a job. So I definitely was just motivated by that freedom. I was kind of tired of working so much and with no result.
You know what I mean? So I kind of just was pushed through with just thinking about my goal day in and day out. Every single week I would sit down and look at my goals on paper and work backwards. And I was like, “You know what? I can’t wait for that life. It’s going to come. So I’m just going to keep on pushing and keep on working and I’m going to get that house even though people are telling me it’s impossible.” I just was just motivated by that future goal in my mind.

Ashley:
I think that’s really interesting because a lot of people go the opposite direction. They look up to and are motivated by people who are living the life that they want. And they see the cars, the houses or whatever that may be, traveling with your family, things like that. But you actually took it the opposite. You looked at people around you and used that as motivation as I don’t want that to be my life. And I find that interesting because when I quit my very first job, I quit because I was not making enough money. And one of the CPAs that was a partner at the firm said to me, “I am unhappy with what I make and I’m a partner. That’s just how it is.” And that right there was a light bulb moment for me is like, okay, you just reassured me I’m making the right decision because I don’t want to be here another 30 years and have regrets that I’m having right now and I want to get out now.
And so I think that sometimes we look at what we want in life, but also it can also be a huge motivation of what you don’t want your life to turn out to be, and that can use that as a driving factor too.

Elijah:
Yeah, I think it’s more motivating to look at that. I mean, it’s kind of hard to look at it that way. Looking at people around you that have what you don’t want. It’s kind of sad, but it’s more motivating because yeah, if you look at people with nice cars and houses and stuff, we all want nice stuff. But when you look around and see the reality of people around you that are not quite living the life that they dreamed of, it really is motivating because you’re like, I don’t want to look up when I’m 90 years old and be like, what did I do this whole time? So I’d rather work really hard, have no sleep, maybe be a little bit lonely or just in the grind twenty four seven, but I end up with a life that I dreamed of. So definitely worth it.
Definitely worth it.

Tony:
Elijah, tell us a little bit about the deal you actually found. How much capital did you have to save? What was the purchase price and what did it cost you to actually get into that deal?

Elijah:
Yeah, so the entire two years of working the two jobs, I was actually deeply in debt. Not deeply, but I bought a car. I just got out of a divorce. So I had to buy a car. I didn’t have to, but I bought a car because we shared a car at the time. I also got a surgery and it was like 13,000. So I was in debt a little bit. So the whole time I was basically paying off debt while stacking money, but I would say the first year there was no money in my pocket type of deal while I was working all those hours. Now the second year around, I was actually saving up for the house. And at that point, I believe that I had to have $13,500 to get my house. And my house was 333,000. I think it was that little 1% rocket money mortgage situation that I ended up getting.
And yeah, it honestly kind of sucked though because the house that I got was a single family, so I couldn’t use the rental income in the deal and show like, “Hey, this is more income.” I had to fully just use my income and what I had to bring towards the table. So yeah, just like 13,000, nothing too crazy, but it definitely was a heavy penny for me at the time, but not too bad.

Tony:
Elijah, you said Rocket Mortgage 1%. Are you saying a 1% down payment?

Elijah:
Yes. Yeah. So that’s what –

Tony:
I’ve never heard of that before. Well, yeah, talk to us about this.

Elijah:
Yeah, so it was a terrible interest rate, so 7.5 interest rate, but it definitely was 1%, which was really awesome. And yeah, honestly, that was the one part about buying a house I really hated. It seemed like the numbers kept on moving around a bunch. I had no clue in that region, but luckily in the end I had enough and it was about 13,000. But yeah, it was a pretty good deal. The area was not too bad. The houses I had to see before seeing mine, the walls were missing. There was rotten racks in the walls. There were so many terrible homes I’ve seen before this one because my price range was super low, like I said, 333. But here in Oregon, in Portland, that’s an okay price for a house, but it seemed like I really was more so being able to afford closer to 300 and under.
But luckily since I had the second job, I was able to get a little bit more.

Ashley:
Now this was a single family home, but you actually converted it into two units. So was that kind of the plan going into this or did you decide to do that after you purchased it?

Elijah:
Yeah, so that was one of the big things that I learned when I was doing all my research because the whole reason why I even though to get a house to turn into two units and lived in a tiny house in the backyard is because I wanted to house hack. So I learned about the house hacking thing. I was like, okay. Basically when I went around and looked at houses, I was always looking for things like a garage or a attic or a basement or anything like that. Now the house that I ended up getting, it does have an attic, but it wasn’t something I can convert. But what it did have was a really weird back room area that was about 400 square feet. And it had a door to the outside and it really was originally the last owner’s bedroom and the back door was just a side door.
But the second I saw my house, I was like, “Yeah, I’m going to put up a wall here and that’s going to be a unit back there. I’ll add a kitchen, I’ll add a bathroom.” And then I’ll rent out the front, which was just, it was so amazing, so perfect. When I was even telling my realtor, she was like, “I don’t know about that.” But I was like, “You know what? I’m just going to do the thing and it’s going to work out.” I had to make it work out because I could not afford the full mortgage alone because I definitely didn’t want to keep on working a hundred hours after I bought my house.

Tony:
And Elijah, once you actually closed, how did you fund that renovation of partitioning off that other unit inside the house? Was it from just, again, money you had saved up? Was it through the loan? Was it some other form? How’d you fund that?

Elijah:
Yeah, so I actually did pay with credit cards initially. And actually I got really, just for the bathroom alone, I paid with a credit card. It was like $6,000 to pay a dude to plumb it and all that kind of stuff. And I actually immediately found somebody to rent my house. So I was doing YouTube for, now it’s been about 10 years, but I’ve been doing YouTube for a while and I made a video on how I was buying a house and what I actually did. And somebody reached out that lived here locally that I’ve been actually messaging back and forth as a homie on Instagram. He’s like, “Hey, I saw that you got that spot. I would love to rent that thing.” And this was before I even put up a wall or added a kitchen. I was like, “Hey, I don’t have a wall up or a kitchen and the bathroom still being renovated.
Are you sure about that?” He’s like, “Yes, I’m kind of in a position where I need to move today.” So I bought my house and I think within one or two weeks later, somebody was already back there renting it out. So yeah, it worked out perfectly. I just had to get the money to get the bathroom made because I was like, “I don’t want to share a bathroom.” You know what I mean?

Tony:
Yeah. I just want to say it’s like some people will call that luck, and maybe there’s an element of that, but it’s like think about all the hard work that went into putting you in the position to be able to capitalize on that person. And it’s like the two years of working a hundred hours a week, the courage to actually go out there and find the deal, to be sharing your journey on YouTube for all the time to build that platform. And when the opportunity presented itself, you’re able to capitalize on the way that there was a win-win.

Elijah:
Yeah, what are the odds? They would come from my YouTube. It was so perfect. I loved it.

Tony:
You might be the first rookie guest that we’ve had that found a tenant through their YouTube channel. Yeah. I’m endlessly surprised at the first that we have in the show, even 700 plus episodes into it. Okay. So you fund the renovation really with credit, you get a tenant in there pretty quickly. What percentage of your mortgage are they able to cover?

Elijah:
Yeah, so at the time my mortgage was 2,550. And right when they moved in, they were paying $1,200. So it was a pretty almost half, you know what I mean? It worked out pretty well. But the thing is though, I didn’t charge for utilities or whatever, so I did have to pay that out of my pocket. And I learned that after a year and a half, I raised it up to 1,350 and I kept it there just because I realized the water. When somebody’s not really paying their own utility, it seems like the electric and water bill are just like, it was just crazy high. So I was like, “You know what? 1,350 sounds perfect.” And then I slowly kept on renovating it. I separated the yard to make it slowly made it bigger and bigger yard for them and myself. Luckily we both had our own driving spots.
I added cameras and gates and the new fence, and I slowly renovated the whole place. But yeah, it was pretty good getting pretty much half of the mortgage from that immediately. And it worked out really well. Here in Portland and where I’m at, that was a pretty okay deal. So luckily, yeah, it worked out.

Ashley:
But you didn’t actually stop there. You ended up putting a tiny home in the backyard and then renting out your unit that you were living in. So what did that cost and how did that process work out?

Elijah:
Yes. Oh my gosh. It’s so crazy the way that my house has always been configuring different ways. Basically, yeah. Okay, so I bought a tiny house. It was $1,000. It was really like an old food cart I found off a Craigslist. And I’ve always wanted to do the tiny house living, always. So I put in my backyard, and I’m not going to lie to you, I had it back there for a year without really touching it because I didn’t know how to plumb it. I didn’t know how to do electricity and all that kind of stuff. Everybody was saying legally, you can’t connect it to your house. I didn’t know about all that. So I had it sitting in my backyard for a little while. But then my sister, she has two kids, she’s a single mom, and she was looking to start a new life.
So I was like, you know what? What if I just said, you know what? Let me just move into my tiny house, get things rolling there. Actually get it plumbed, get electricity. So I put an extension cord and I just got the hose from my backyard and plumbed it that way. I was just trying to find DIY ways to live in that thing so she can move in here because this is a two-bedroom house. And while the dude in the back was living there, she lived up here with her kids. And basically, yeah, I just lived back there for a little bit. My sister ended up finding her place on her own and moved out. And I actually had to hop back in here and renovate this place. I did everything on my house. New outlets, paint job, floors, everything you can think of I renovated in this unit at that point.
And then I found some new tenants and that’s when the eviction happened.
And I don’t even know if it’s technically an eviction because we did go to court and all that kind of stuff, but I never really received any money from it. They just left free without paying kind of deal. And they ended up just leaving. Yeah, but it was pretty tough because I never wanted to evict somebody. That was one thing I was like, I like the landlord lifestyle because I get to live off the rents and stuff like that. I live in the backyard for free essentially. But when it came down to evicting them, I felt really bad, but I was just trying to work with them and they just weren’t wanting to pay me. So they ended up moving out and I renovated this place again. And I actually asked the guy who was living in the back to move up here so I could renovate that space back there.
It’s just a whole lot of renovations that I keep on doing over here. And I pretty much just ended up having him move up here while I was still living in the tiny house in the backyard. And that’s when I hopped in the back unit and renovated that because it had a really big issue where the ceiling looked like it needed some love and the floors and the walls, everything. So I spent about six months renovating that back unit. And yeah, it was looking really good. And tell me why. The second I was done with the renovations back there, that guy who moved back there to the front, he ended up putting in his notice. So I was like, oh my gosh. So I spent six months renovating the back unit. He got his notice, so he left. And I was like, okay, now I got two empty units.
I got my tiny house in the back. What do I do now? And that’s what happened a couple months ago. I ended up just saying, you know what? I’m going to sell my tiny house and live in the entire space. Turn that back room into a bedroom with a walk-in closet as a kitchen and just live in the entire thing. So that’s kind of where I’m sitting at right now, but it definitely was a process. I think I learned from that eviction, I don’t really want to be a landlord, at least a landlord that lives on site because it was extremely awkward walking past them every day. You know what I’m talking about? It’s just like, ugh.

Tony:
That was actually my question, Elijah. Evictions are always tough, but it’s even tougher when it’s a house hack eviction. So knowing what you now know, is there anything you would’ve done differently on the front end, either tenant screening or anything? What lessons did you learn going through that process?

Elijah:
I got to say, I want to honestly say I was a little bit desperate to get tenants in. So I know that alone, no desperation would be great because I looked past a few things. They sent me their. They basically said they both didn’t have, it was a couple, they both didn’t have a job, but they had this large amount of money in their bank account and they showed me a screenshot. And later after looking, I’m like, that is the fakest screenshot I’ve ever seen in my entire life. I don’t know why I just let them slide into my house like that, but there was that. So I would probably want them to have a job. I think that that was my one thing. Why did I let people that don’t have a job and the screenshot of their money and their account didn’t look right?
Nothing really looked right, but I kind of let things slide by. So I would say the number one thing that I would’ve changed is just simply actually looking at the paperwork and not just letting the very first person that looks at my house take it. So yeah, that whole situation, I honestly would blame myself for that eviction because even their credit scores were extremely low. Everything I kind of let pass because I needed somebody to move in here and they were paying $2,100. So I was like, “Yeah, that sounds good to me.” I did no deposit and everything too. So I was like, “Just give me the 21 and we can call it.” You know what I mean? I did do a three-month lease though, so luckily it wasn’t a full year or anything. But yeah, I was like, I need that $2,100 because I renovated so much in here right before they moved in.
And yeah, I messed up, but you know what? It’s all right.

Ashley:
Coming up, Elijah is going to share what happened when things got hard and the honest lessons he took out of all of it. That’s right after this. Okay, welcome back. So we’re going to get into the parts of the story that usually don’t make it into the highlight reel because I think that’s truly where the real education is. So Elijah, you went through your eviction and told us what happened and what you would’ve done differently. So now let’s talk about the stressful, the expensive, and the emotionally draining part of this. For a rookie who has never been through one, what do they need to understand about evictions that nobody actually tells you upfront?

Elijah:
Yeah, I would definitely say even before being a landlord, I would look into it because I actually was looking into it while going through it. Now, I don’t know if this is the greatest thing to say, but I did use ChatGPT throughout it because I don’t know any lawyers. I even was looking up lawyers and they wanted a heavy penny before even getting started. So I basically just kind of looked up everything in the moment. I luckily figured it out and stuff and went down to the courthouse and left a thing on the door. There’s so many different, very specific steps that I learned along the way. You can’t just knock on the door, text them. I was definitely trying to stay level-headed and just honestly understanding where they’re coming from. They were telling me they’re going through things and I understand that, but I’m also like, I got bills to pay.
You know what I mean? We’re all about to be evicted if you guys don’t pay. You know what I mean? So it’s that serious. So yeah, I definitely had to learn along the way on what exactly legally happens at that point. And honestly, one thing I didn’t look into too much, but looking back, I should have looked into, was help for the landlord in that position. Because I know that there are things, especially here in Portland, Oregon, that they could have helped me out rather than me trying to kick them out and stuff like that, trying to get to it. So there’s probably more research I could have done in that moment. But yeah, I’ll just learn along the way and just try to keep my house because that was my main thing.

Ashley:
Yeah. Since COVID, there’s so many programs and organizations, well, at least in New York, not necessarily help the landlord, but will give financial assistance to the tenants. So I’m going through an eviction right now and things recently changed a little bit since the last eviction I did maybe two years ago, I think. So my attorney’s going over it with me. But basically for them to even get assistance, they have to be served. They have to get their court date, and they have to actually attend court and get the notice that they are being evicted before they can actually go and get financial aid. So what a lot of people are doing is taking advantage of the system by, okay, I’m not going to pay. Me as the landlord, I have to pay all the legal fees. They have no cost to them. And then they just go to the court date, get their thing, and then they get the financial aid, and then they pay their rent and then they get to stay.
So there are different programs out there. And I think the best thing you can do is educate your tenants on ones that actually are proactive before you have to actually go through the whole process. But that’s New York State specifically. I don’t know other states.

Elijah:
Yeah, it’s tough because it would be great if it was great for both parties, the tenant and the landlord. It’s tough. It’s a toughie. Eviction in general, it’s hard. We all go through hard times, but it does suck when one person has to pay the other person’s way, but hopefully everything goes good with it.

Tony:
I think another unique part of your story is that, I mean, obviously you had the eviction. You had the one tenant who was there for a while that seemed to work out well, and you also had family. How was that dynamic being basically a landlord to your sister? Was there any friction there? Is there anything that you can teach rookies about renting to family specifically?

Elijah:
Oh, that’s a really good question because that was actually something I learned a lot about before even buying my house, just family in general. I have a lot of family members that are always going in and out of housing and stuff like that. And I definitely needed to know about all that kind of stuff going into it. But yeah, luckily my sister, my older sister, she is the closest person I am in this world. She helped me out with many of my renovations here financially. Honestly, I would say she pretty much owns half of my house for the most part because she really helped me out a lot with every, even physically helped me out. She helped me renovate everything in this house almost. So luckily when she was here living in the house, things were okay. I think it’s just a little tough because her kids were young, really young at that point, so things would get broken a lot.
A window got broken, I had to pay $700 to fix it. So it’s kind of tough because there’s maybe a little bit of resentment there, but luckily me and my sister communicate really well. And so I was like, you know what? Could we work something out over here because I don’t got it to fix this thing or that thing. But I did learn a lot though. She definitely told me, “Hey, this stove needs to be replaced, or this fridge needs to be replaced,” or whatever the case may be. And I got on, I think I listened a little bit more to my sister because obviously a tenant is going to want better and nicer things in the house and whatnot. But my sister was open and honest about what needed to be done around here. And my sister actually paid me the full amount three months before even moving in.
So money-wise, it wasn’t bad or anything. Communication was there, everything was there. I would think the hardest part there was being so close, literally living in the backyard while she lived here. That was probably the hardest part because I like my alone time and her and her kids are very social. But outside of that, no, I would say everything was good, luckily. I’ve heard the horror stories online though of a family member moving in and they’ve just stopped paying rent or whatever the case may be. But yeah, luckily everything went really well.

Ashley:
Now, when you were landlording, did you use any kind of property management software or rent collection or tenant screening software? Any kind of software tools or apps?

Elijah:
That was something I learned quite literally the last two months of being a landlord. So that was actually, I’m really glad that you asked that because that is something I do want to talk on. My tenant I had for three years was amazing, seriously amazing. But the one thing that I messed up on was, since I didn’t use anything like that, like a management company or anything like that, it was very homey vibes, like friend vibes, and it was not very professional. I mean, he was paying his rent and everything like that, but when it came to the back ends of things, maybe he needs something done or whatever the case may be, it just wasn’t really professional filling. So at the very end of the last two months of being a landlord with him, I was like, “Hey, you know what? We’re going to start just going through email now,” and that kind of thing.
But actually, I guess the one thing I did use was Zillow for just the screenings, the background. So that was the one thing I did use. But with my first tenant, I was like, “Just send me a screenshot of your credit score and send me a picture of your pay stub.” That’s how I was with him. But yeah, I definitely learned, yeah, going forward, I need to spruce it up a little bit and use real. I was even looking at property management companies. They were just looking a little more expensive than I wanted to pay, especially because I’m here on site. Now, if I wasn’t living on site, I probably would have definitely looked into that. But there’s just that thing about being younger too. All the tenants I had were much older than me. So there was a respect thing that was going on then, which was weird, especially on top of that, not using a management company and being through text message.
Just professionally, I did not play that right at all. But I was learning throughout the way. And at the very end of it, when I was looking for more tenants after I renovated the back unit, I was like, “You know what? Let me go fully through an online thing so they can pay online, so they can get the screening done online and stuff like that.” But yeah, luckily there’s a lot of good ones out now for the low. We’re free too.

Ashley:
Now with the tenants and things like that, you’ve actually done something that most of our rookies that come on the podcast don’t do is their story ends very differently where they’re going on to buy more rentals or keeping their rental. But you actually have decided to no longer be a landlord. So you had mentioned briefly you moved back into the house and I believe you sold the tiny home. So walk us through that transition of actually reversing your decision.

Elijah:
Yes. This was definitely one of the biggest curve balls I’ve ever thrown at myself in life because I’m very much a planning type of person. So I have a 75-year life plan and it did involve a lot of real estate buying. And honestly, back in January when I was still renovating the back unit, I was like, “You know what? I don’t know why, but I don’t really like the idea of living my tiny house in the back with two tenants up here anymore.” It just seems like probably from everything I’ve gone through with the evictions and like I said, the unprofessionalism that I’ve started with, I think that after going through all that, I was like, “Is there any way that I can afford just living in here and not being a landlord anymore?That’d be amazing.” And having my whole backyard and my whole house to play around with.
And luckily, since I do have YouTube and I record my entire life, all parts of my life, I was like, “What if I just did that?” Because my main thing that people like to watch is renovations for some reason. They love to see me working. So I was like, “What if I just did a ginormous series on turning. Move my rental property into my own dream home. Because that was also another thing that I was going through. The renovations I did here were all, for the most part, DIY, and I would get a lot of hate for that. Like, oh, your tenant, da, da, da. They’re not going to like that, or it’s not up to code, or whatever the case may be. I’m over here just like, I’m just trying to make things work with what I have. And now that it’s my own home, I was like, you know what?
That seems kind of nice, not having to worry about if the tenant’s going to like it or not, because that was also something I dealt with. The tenant I had for many years, there was a lot of things that were not to his liking, and I felt almost like I had to uphold a certain thing for whatever the house. You know what I mean? Things had to look a certain way and not the way I wanted them to look. Simply like my kitchen floor is checkered tile. A lot of people aren’t into that. You know what I mean? My house is blue. A lot of people aren’t into that. And I was like, I hate having to make my own home fit what other people like. And so I’m like, you know what? Why don’t I just risk it all and just dive in and just live in my own house?
Because I quit my job about nine months ago when I was renovating the back unit with the tenant living up here in the front house. And that’s why it was a real risk because now I don’t have a job and I don’t have tenants, so I lost all my income. So I’m just going to jump into this YouTube thing, full force. So that’s kind of what I’m doing right now.

Ashley:
We have to go through this timeline of events. So you are working a hundred hours per week, then you buy your first property, and I assume at that point, once you get tenants in place, you cut back on those work hours because you now have rental income coming in.

Elijah:
Yeah, I went down to 60 hours. Yeah.

Ashley:
Okay. So then you cut back from there and then you decide to get rid of the cashflow, get rid of the rental income, and you no longer have tenants, you move back into the house, but now you quit your job and you’re going full scale into YouTube. And I think the thing that stands out to me is that real estate gave you the opportunity to be able to fulfill a passion of doing YouTube. And I think that’s something that’s missed out on is a lot of times people want to chase the thing that’s exciting for them with real estate like, oh, I want to do short-term rental because I would love that. I’d love to manage it, I’d love to design it, things like that. But sometimes if you just do what’s going to benefit you the most and has the most opportunity, even if it’s the boring thing or the hard thing, it’s going to free up time for you to work on those other passions.
If you were still working a hundred hours per week, you probably wouldn’t have had time to actually start a YouTube and to be a YouTube creator. Or then when you had the real estate, you were. And I think that’s such a missed opportunity cost of that people don’t factor in what real estate can do for you. Yes, everyone chases financial freedom. I don’t want to have to work at all anymore, but it also frees up time for you to pursue these other ventures. I think that is great that real estate gave you this opportunity.

Elijah:
Oh yeah. Yeah. Real estate is like, I preach it to everybody who will listen. Definitely buy a house, do the little house hacking thing to begin with and then maybe just go off and –

Ashley:
Dan, it doesn’t have to be forever.

Elijah:
It doesn’t have to be forever. Exactly. And I do want to say I’m playing with the idea of in the future, because I do have plans to really grow and grow and grow my channel and stuff and just my money and stuff like that. And I do want to own property, but I want it to kind of look a little different. I’m kind of imagining just like an apartment or a house in every big city and have it be like an Airbnb or something like that. And if I were to do something else, maybe like a huge apartment complex that I don’t. My main thing is I don’t ever want to live on site. I don’t ever want to do that house hacking thing with somebody else unless it’s super separate, you know what I mean? Because I’ve just learned like, yeah, that won’t work out.
But yeah, I definitely, I love real estate. I think it’s a great way to grow and stuff because all it is is just throwing your money into the basket and fix it up or whatever and live there, rent it out. I just love real estate so much. It’s so obtainable too. And it really sucks because people that I know and stuff and interact with, I guess my age group or whatever, a lot of people think it’s impossible to buy a house and I just don’t get that because it’s not. It’s so possible. If anything, it’s just a math equation. You know what I mean? And so I definitely do think that real estate is just such a great thing to have you climb the ranks or whatever. All right

Tony:
Guys, don’t go anywhere. We’re closing out with Elijah’s most honest takeaways for any rookie who’s thinking about house hacking and wants to go in with eyes wide open. We’ll be back in a minute. We’re back here with Elijah. I think one of the last questions I want to ask is just given the ups and downs of the real estate journey you’ve been on so far, do you consider this chapter of life a success?

Elijah:
Oh, a hundred percent. I would say this is probably the biggest, most pivotal point in my entire life. I mean, I’m just so grateful for my past self of going through those hundred-hour work weeks, going through, living in the back, because living in my tiny house wasn’t easy. You know what I mean? I had no heat, I had no cooling. I literally, it kind of felt like I lived outside essentially, even though it was a dream of mine to live in a tiny house. It was just a really long time, a year and a half. And I feel like I’ve just gone through so many hard things in these past three years, but so many great things too. So definitely, yeah, I would say it’s 100%. I don’t regret anything I’ve done. I’m just so happy with everything I’ve done. I’m just so grateful to be living where I am now and just in my own home and designing it the way that I want.
I would say I’m truly living my dream right now, which is kind of crazy to say, all thanks to my house, truly. Well,

Ashley:
That is amazing to hear. And I guess one last thing I want to ask you is, have you heard of the short-term rental loophole?

Elijah:
No. What is it?

Ashley:
Okay. So I’m going to have Tony educate you on this because you have talked about having Airbnbs and other cities, and you are hopefully going to be a high income earning creator that is going to be taxed heavily on this income and not have a ton of expenses as a creator. So I think that in the future, the best use of you to do real estate is to actually get a short-term rental and take advantage of the short-term rental loophole. So Tony, take it away.

Tony:
So the short-term rental tax loophole basically allows you to write off a big portion of your active income, so your creator income, against paper losses from your short-term rental. So if you buy a property, as long as the average stay duration is seven days or less, you can do what’s called a cost segregation study, which is like a fancy word for an engineering study where they’re able to take your depreciation and shrink it from the normal almost three decade timeline, and you can accelerate all that into your own. So basically you buy a house for whatever, a couple hundred thousand bucks, you spend a bunch of money on furniture and design and getting it ready, and you can recapture a lot of what you put into that deal as a paper loss in your tax return. And then that brings down your taxable income, which for a lot of folks can either greatly reduce or sometimes fully eliminate their tax bill.
So in a nutshell, that’s what the short-term rental tax bill is.

Elijah:
Okay. I need to do that. That actually sounds like perfectly, because I would just be in there. I’ll just go over maybe once every couple of weeks or months or something and then just rent it out for, you said seven days?

Tony:
Yeah, seven days or less, as long as that’s the average day duration.

Elijah:
Oh my God. That is amazing. Yeah.

Tony:
Change your life again right now. Elijah, there you go, man.

Ashley:
And then after you buy that first short-term rental, you’re going to come back on and let us know how much you saved in taxes. Yeah.

Elijah:
Give me three to five years. I got you. You know what I mean? Who knows? It might be even quicker than that, but yeah, that sounds good to me.

Ashley:
Well, Elijah, thank you so much for joining us today on Real Estate Rookie. Where can people reach out to you and find out more information?

Elijah:
On Instagram, I’m Elijah with two Ys_Ray, with three Ys. I’m also on YouTube. I believe it’s just Elijah Ray132. So I post about all sorts of things. Now I have five YouTube channels. It’s a lot, but I post daily everywhere. TikTok, Instagram. You can find me if you could look up Elijah Ray, I’m sure. But yeah, I really appreciate you guys having me on. Seriously, I’m glad that you guys caught me at this point in life, even though your guys’ podcast is about being a landlord in real estate and stuff, and I’m technically in there, but I’m also technically not because I have no tenants. I just love that now I can talk about it just looking back at the whole thing. It’s just so amazing. Yeah, and I appreciate you guys for even having the podcast. It’s so interesting.

Ashley:
Well, Elijah, thank you so much for joining us and for sharing your story. And I think it is super, super valuable to not only talk about people who continue to be landlords, but people who decide to change and pivot or maybe take on a different strategy. So thank you so much for taking the time to share your story. I’m Ashley, he’s Tony, and we’ll see you guys on the next episode of Real Estate Rookie.