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Nov. 16, 2022

75: Paying off $100k Student Loan Debt with The FI Couple!

75: Paying off $100k Student Loan Debt with The FI Couple!

Have you ever Googled "How to pay off student loan debt?" So did Josh and Ali Lupon. With $100k of student loan debt and an income that wouldn't allow them to pay off that debt anytime soon, they found a solution through real estate.  In today's...


Have you ever Googled "How to pay off student loan debt?" So did Josh and Ali Lupon. With $100k of student loan debt and an income that wouldn't allow them to pay off that debt anytime soon, they found a solution through real estate. 

In today's episode Alan Corey learns exactly how Ali and Josh, The FI Couple, were able to House Hack their way to financial freedom. In less than 3 years they were able to pay off their entire $100k student loan debt and essentially live for free through their rental properties. Real estate has the power to change your life financially and Ali and Josh are true testaments to just that. 

Follow The FI Couple on Social Media!
@TheFICouple
Check out Ali and Josh's Website!
https://www.theficouple.com/

Follow Alan on Social Media!
@RealEstateMaxi
Check out more Real Estate Resources!
https://www.realestatemaxi.com/

 

Read the transcript here:

House Money Media 

Alan: Welcome to episode 75 of the Real Estate Maximalist podcast. Today we talked with Ali and Josh Lupo, also known as the FI Couple, who came from a hard scramble background to now teaching financial independence to others. 

Josh: I had nothing. I grew up incredibly, incredibly poor, and rarely was it like, "you have the money," I can always outwork people, because that was all I ever had.

That was the only resource I had that limiting the belief of like "I need money to buy real estate." That's only half true. You do need some level of money to buy real estate, but that doesn't mean it has to be your money. And that was big for us. 

Alan: That and more in just a minute. But first, a word from our sponsors.

Josh: I'm Jasmine from Jasmine Mortgage Team and we love working with first time home buyers and new investors, really anyone looking to change their life through real estate. I love helping people make really smart financial decisions. I have worked with Alan and his personal clients for many years on many, many deals, and I would love to spend some time learning about your journey and helping you achieve your goals.

You can book a free consultation with. By calling or texting 404-600-1500. Follow us on Instagram @JasmineMortgageTeam, or our website is jasminemortgageteam.com. Hey, this is James and Emily, and 

Ali: you've heard us on episode 

Josh: 72 at the Real Estate Maximalist Podcast, and we've just launched a course on teaching you how to manage your Airbnbs remotely.

It is a video course. There's videos, and then there are lessons that go along with that so you can read along. We have 10 different templates, a furnishing checklist, a cleaning checklist, a quarterly cleaning checklist, a quarterly maintenance checklist. We have all the tracking for spreadsheets. We've got some templates for guest messaging.

And then we actually go through and show you like, Okay, this is what you should be doing. This is how we find cleaners. This is how we find local handymen. This is how we schedule those people. We go through all of that process, everything that we do, we have on there, we've covered all our bases, and teach you how to do everything remotely as well.

And for the listeners of this, you can go to rethinktheratrace.com/maxi to find our course for $399, and you're also gonna get some bonus content there as well. 

Ali: You can find that at rethinktheratrace.com/maxi. M A X I.

Alan: Today we have Ali and Josh known as the FI couple, or F I couple. You'll find them on social media. They are bringing great content every single day. They have a great story. They paid off a hundred thousand dollars in student loan debt, buying a triplex, using some seller financing, getting creative, hardworking, networking.

You know, they find a way to get it done So what got 'em on this 

Ali: path? Yeah, so we live in upstate New York, right outside of the capital of Albany. We've been here for a very long time, and it's where we live and 

Josh: invest. It was about five years ago. Ali had just graduated from her master's program and we were planning to get married in 2018.

Um, so that was like the first time, just the act of budgeting for a wedding was our first time actually kind of talking about finances. If a wedding costs this much, how much do we need to save? It was at that point, learning how to budget that we realized, Wow, we have over a hundred thousand dollars just in student loan debt, not including car loans and credit card debt.

We were living not just paycheck to paycheck, but we were going into credit card debt. So I went to the internet and it was like "how to pay off debt" and we discovered the Dave Ramsey method to start and I was like, Okay, rice and beans, we gotta sell the cars, so on and so forth. That lasted, I don't know, three months, four months, and it was like, this is not sustainable.

So I went back to the internet and then that's where we learned the concept of house hacking. Cuz when we were looking at our budget, a huge portion of our fixed monthly expenses was rent, and we always just assumed that we have to pay rent. And then when we discovered house hacking, it was like, we don't have to pay rent.

And there's creative ways to buy real estate without being like, quote unquote, like big time real estate investors are having a lot of money. 

Alan: House Hacking is the tried and true method for growing your wealth quickly, especially if you're not one of those big real estate investors. It's actually how I got started as well, and if you're unfamiliar with the concept, house hacking is basically finding ways to turn your living expenses into income.

Most people spend up to 50% of their paycheck on rent or a mortgage payment, and utility bills 50% of your paycheck. If you're working 40 hours a week, 20 hours are just paying for the house that you live in, if you could reduce that with some tips and tricks of house hacking, Well of course. Why wouldn't you?

So, in my instance, I bought a duplex. I lived in one unit, got two roommates. It was a three bedroom. And charged them rent. And then also I rented out the three bedroom downstairs of the duplex. So I had five rental income streams that covered my entire mortgage payment and then some. And all of a sudden my paycheck felt like it was doubled because I had no more housing expenses.

In Ali and Josh's case, they used house hacking to pay off their student debt $100,000. And by doing that, the light bulb went off and saying, Wait a minute, we can significantly change the way we live and the money we bring home if we just continue this concept. Even after the student debt's paid off. 

Ali: I am a clinical social worker.

I have my master's in social work and Josh is a job coach for workers with disabilities. Neither of us ever made more than $50,000 a year. We're in human services. So we had these jobs, we had part-time jobs on top of that. We had side hustles. At one point Josh was driving for Uber. Um, so it was very much like we weren't

you know, high income earners. And oftentimes when we would listen to podcasts and read books about real estate investors, they did start off with really significant incomes that kind of helped propel their real estate investing journey. And that was definitely not us. Nope. 

Josh: Yeah, I, um, so Ali, Graduated in 2017 and from September to December of 2017, that was our first time ever having two full-time incomes.

Yeah. And we were still below probably $85,000 a year household income. And then in January of 2018, like we went into that year of our wedding, it was like, okay, this is the year we're both making money. We have a wedding, we're gonna crush debt I got fired within like the first two weeks of January 20 of 2018.

Um, and so our income went from maybe $85,000 a year to 45 to maybe $45,000. And I was like, Well, we still have a wedding, uh, in nine months. And so, yeah, I signed up for Uber and so when I wasn't transporting people via Uber, I had real estate podcasts going in my car because I was like, I don't know how we're gonna buy real estate, especially now, but I don't wanna wait until we have the means to buy real estate, to learn real estate.

And so every day for four, five, sometimes six hours a day, um, I always just like studying real estate through podcasts. That's awesome. Someone 

Alan: listening to this podcast will probably be like, Hey, this is me. I'm gonna tell the story one day. Now Real Estate Maxi listeners may be experiencing exactly what Josh is doing.

You know, driving around, listen to podcasts, seeing the possibilities of what real estate can do. But if you have a partner that might not be fully aligned with that vision, that's okay. Ali, were you and Josh aligned at the 

Ali: beginning of this? Yeah, not at all. We were the opposite of aligned. Yeah. Uh, so Josh, as he had mentioned, was driving for Uber and was listening to podcasts like upwards of six hours a day.

Ali didn't know that was happening. So kind of like several months into this self discovery journey of real estate, Josh just kind of comes at me like a fire hydrant and is like, I've discovered real estate investing. I wanna become landlords, I wanna sell our cars, I wanna house hack, like, you know, going off on this.

And he's so clearly excited and passionate and all of these things and I'm like whoa, I'm living in a nice luxury rental apartment. I thought we would buy a single family home. I thought we would have, you know, the nice cars and the 2.2 kids and like, that's the life I envision. Like I never envisioned, like owning real estate, being a landlord, having tenants like you're crazy right now.

I really thought he had lost his mind. Um, so it took a lot of conversations, a lot of conversations to get on the same page and become aligned with this. A big 

Josh: thing for us that we talk about, especially for couples who wanna do kind of what we're doing a little bit, is learning how to speak your partner's money language.

Like I was very much the, the deal, the, uh, Excel sheets and stuff like that. And that's what I was bringing to Ali, but that didn't really speak to Ali's money language, and again, went back to the internet, "how to speak to your partner about money", so on and so forth. And so when I, when I learned how to better communicate with Ali and not make it about like cash flow and cash on cash, et cetera, but more so like, Hey, what are the things that mean the most to us that we wish we had more time to do?

What are our top values? This is how real estate, but especially this is how paying off six figures of debt will allow us to lean into those values more. And when the conversation shifted in that regard, and it wasn't so much about the real estate, but more about time freedom, all of a sudden the, the conversation, the energy around the conversation evolved and I got more on board.

Yeah. 

Alan: So tell me about this first property that you found. So we 

Ali: immediately got pre-qualified for a mortgage. We were at little Fish in a big ocean. We were doing a 5% loan. We needed seller concessions. We literally were scraping together every single dollar we had to buy this duplex. We actually

instead of going on a honeymoon, we took all of our money to buy a duplex instead. In the beginning, we were putting in offers left and right and we were getting outbid and we were going to properties that were in really rough neighborhoods and the numbers were really good on paper. Um, but there were also two murders on that street in the past year.

So, uh, it took a lot of finagling and balancing to find like the right deal for us, but we ended up finding an incredible deal. It was off market. Our real estate agent found it for us, and it was in a nice little neighborhood. Uh, The property itself, like we lived in a three bedroom, one bathroom apartment with a garage and private backyard.

It was nicer than our luxury rental, which I think, I thought that house hacking would definitely mean a downgrading quality of life. And this was without a doubt, nicer than what our rental 

Josh: was. It ended up being, uh, it was $158,000. So we're in upstate New York. Sometimes people think of New York City valuations, and this was in 2018.

Um, and so we used a 5% conventional loan and we got, I think $3,000 in seller concession. So all in, um, we put $14,200 down to buy it. And, um, it was already an owner occupied property and they had done a really good job of upkeep because they lived there. The upstairs was renting for $725 which we knew was really below market.

Um, we were just excited to collect rent and cut our more, our, our rent payment in half. Or actually it was more than half. So what were you 

Alan: paying at the luxury apartment in rent? 

Ali: We were about like 1400. And then when we moved to this new place with the tenant paying well below market, we were in like the 600 range.

Josh: Yeah. Between six and 700. And we knew, which was amazing, and we knew. You know, even back in 2018, that apartment was probably $200 a month below market. Um, we weren't gonna raise rent or anything like that. This was all very new to us. And so that tenant actually stayed there for another year. On a month to month basis.

They eventually moved out to buy a home, and we ended up putting about $2,800 into the unit. So like new appliances, fresh paint. Updated the H V A C. Um, and then we rented that out for $930. Our fixed monthly was $1,380. Right. Including taxes, insurance, and pmi. So then our monthly out of pocket for that property went down even more.

And so now, like at that point too, so now it's like 20, end of 2019, um, Ali had taken a new job and so she was earning a little bit more and I had actually kind of scrounged together a consulting business that started off very part-time, but eventually grew into a full-time income. Um, we had gotten rid of our car payments and so now we have like a pretty good amount every single month that we could just throw at student loan debt.

I just 

Alan: wanna pop in and emphasize something all mentioned. She thought moving from our luxury $1,700 a month apartment into her House Hack would downgrade her lifestyle when it actually did the exact opposite in more ways than one. She got a bigger place, a nicer place, and it was cheaper. And really the perks, the luxury perks she was getting was rapid payoff of their student loan debt.

This is lifestyle designed through real estate that I love. You don't have to be a giant mogul. You don't have to want to travel the world. You could just want to pay off your student loan debt or start your own business. There's so many doors that will open when you just start getting involved in real estate investing.

Josh: Yeah, exactly. And like if we hadn't done all that, the odds of me like taking a chance in entrepreneurship would've been really, really hard cuz like, honestly, like the first six months I was making about as much as I was making at Uber. Um, but because our cost of living went down, we kind of have a little bit more of like a margin of safety.

And so that gave me the chance to really kind of grow my business organically, which ended up, you know, paying off 

Alan: nicely. So for Ali, how quickly did the light bulb go off saying, Hey, we need to do more real estate? 

Ali: Uh, it didn't go off. Yeah, you would think, you would think it would've went off after the first house hack.

So I was still like very skeptical. But we found this first house hack. I loved it. Um, but you know, whether you're a first time real estate investor or a first time homeowner, especially if like you're not super handy or you don't have family support, that's super handy. It can be really overwhelming. So things were breaking in this house.

I mean, water was coming through, the ceiling pipes were bursting, and every single one of those events that happened, Felt like a catastrophe. Um, but honestly it was such an incredible learning opportunity for us because you learn with houses, you know, we're in the work of people and people are not so black and white, but houses are very like, If there's a problem, this is the solution.

And it kind of forced us to like stretch and flex that muscle of how to make home repairs, how to attend to situations. So that was good. But even so, I was like, we have this first house hack. Now we're done. Now we're gonna go to the single family home. We're not real estate investors, even though we have this property like this was to pay off debt.

So then in, uh, spring of 2020 when Josh starts saying like, Let's start looking for our next deal, we should house hack again. I'm like, You lost your mind again. I don't wanna do this again. But again, we still had quite a bit of debt. We really wanted to reach the goal of being able to live for free. So we started looking for properties, but none of them seemed like the perfect fit for us.

Josh: Yeah. So, um, all of 2019 I was like, I was probably consuming even more real estate podcasts cause like now I actually owned real estate, so I was like even more excited and we had set the goal of like, yeah, I was really excited to be spending, you know, four, $450 a month in rent, but it wasn't zero. And that was like the goal.

And I'm very much like a goal driven person. So as we began wrapping up 2019, Uh, it was like, if we can find a decent deal in 2020, yes, we'll buy another house hack. And so that's how we started the year. But then as you, everyone probably recalls like 2020 was a pretty scary year, so we kind of shut everything down the world, shut down in March and we thought, well, this is clearly a very scary time to buy real estate.

We don't know what's gonna happen etc.. 

Ali: So in about May of 2020, we were turning over one of our apartments at our duplex. So I was outside painting whatever, and one of our neighbors walked by us, who Josh had connected with a year or two ago, um, about his property and was like, Hey, like I'm thinking of selling my property.

That was literally like five houses down from our 

Josh: current house hack. And at that time in May, he didn't really express a whole lot of interest in selling and I just said "fantastic, we're five houses down. If anything changes, you know how to find us." Yeah. I would say probably about three months later he sent us a text.

"Hey, are you guys still interested in the property?" Absolutely. We're still interested in the property. In October of 2020, we bought his off market duplex, $152,000. Uh, we used $2,000 in seller concessions, and we used a three and a half percent FHA loan all in, it was $13,200 between, you know, down payment and closing costs.

Um, and this was really cool. The, the fixed mortgage is 2.7%, 30, 30 years, especially in a year like 2022. Right? Uh, the total monthly is $1,250. And we inherited another tenant who was paying $975, and we moved into the downstairs. 

Ali: At this point, like we're living for free. Yeah. Because the cash flow from Property One is covering our expenses here at Property two.

And I think this was the point, like once we get into this property, that I really was like, Okay, I think I'm kind of into real estate investing now. I think hitting that live for free goal and just getting more comfortable with truly like being uncomfortable and like things arise, things change, but seeing the traction of one we're living for free.

Two, we're paying our debt off so aggressively and we wouldn't be able to do this without real estate. I started to see like the, wow, we have a wider margin between our income and expenses, and we're starting to see that we have more time freedom and all of those pieces that just, it gave us more financial breathing room.

It

Josh: was kind of like the, the compounding effect of that, like snowball, if you will. And it started getting to the point where it was like in 2018, we were lucky if we could make a $200 a month, maybe a hundred dollars a month student loan payment. And now just through the compounding efforts of everything we were doing, we were starting to make bigger student loan payments every single month than the amount of income that we were making back in 2018.

Ali's job, her income was steadily growing. Uh, my consulting business was steadily growing and our expenses were continuing to go down, so that gap was getting bigger and bigger, which meant making bigger and bigger payments, you know, saving a lot more, um, especially for future real estate deals. 

Alan: So like most people and what I went through as well, you learn to be a landlord on the fly.

What advice do you have to maybe someone that their sticking point, like, I don't know how to be a landlord. How did you guys figure it out? You know 

Ali: what? I have to say, we definitely made quite a bit of mistakes when we first started, but truly, I never like to call things mistakes because I feel like they're just really good opportunities to learn and get better.

So when we first started, I think especially as a house hacker, it's your home. You're living there. So I think it took us too long to develop systems and really treat it like a business. And I think that that's a shortcoming that a lot of real estate investors make especially if you're house hacking. So I think right from the get go, you wanna make sure that you are putting systems in place.

So luckily we were smart enough to create rental business accounts where we put that security deposit in a separate account. Um, we had a separate card for any rental expenses so that it was kind of like separate from my Amazon purchases and our grocery store. Right? Um, so that was a big thing, but really just keeping record and documentation of everything.

Everything's in writing, making sure that everything is in little folders to organize for our CPA. Um, and even getting a CPA like that was huge once, once we became real estate investors. And 

Josh: I think sometimes people hear the word landlord and maybe it feels daunting or overwhelming. I don't know how to be a landlord, but real estate is just, it's a small business.

Mm-hmm. It could be a two unit, you know, portfolio. It could be a 300 unit portfolio, but it's, if you treat it as such, most small or big business owners who we know who have done really well, they do a great job of helping people and they do a great job of managing profits. Mm-hmm. . And so for us to to be successful landlords, first and foremost, we wanna provide a really good experience for tenants, right?

It's like, give to them what you would expect from a landlord yourself. And so we try to make sure that we buy in good, safe neighborhoods. We keep properties clean and updated. If there are maintenance related matters, we're very prompt and customer service oriented. Um, and that helps as far as just like tenant retention, we don't really experience a lot of turnover and that helps us a lot.

And then on the flip side, like Ali was saying, we're really diligent about managing the profits and the finances of the buildings, um, and of the portfolio, everything that we make just goes back into the portfolio to ensure that there's never an instance when if something were to break and our tenant needed it, I would never wanna be say, Oh well, You know, we don't have the money to fix this thing that's essential to your wellbeing.

Ali: And I think really, like as you said, Alan, like we didn't know how to be landlords. Like there were situations that arose and I was like, How the heck do we deal with this? Well guess what? I have my phone and the internet and I made a network of other investors and other people through my phone and in person that I can connect with to spitball, like different scenarios and different things that are happening.

So I think there were a lot of times where we didn't know what to do, and there are still situations where we're like, Oh, how do we handle that? But you know, it's a fluid evolving situation where it's like you don't have to have all the answers and that's okay. And again, it's just trying to be flexible with understanding like things are gonna come up and you're not gonna know how to handle it, but you'll figure it out.

You know?

Alan: May I ask how old you guys 

Ali: are now? Yeah, I'm 31 and Josh is 32. 

Alan: And where are you on your a hundred thousand dollars in student loans? We paid 

Ali: it off last January of 2022. 

Josh: We, so we started, so we closed on that first duplex of the week of Christmas, 2018. Um, literally spent like almost every dollar that we had, uh, except we had, we kept some in reserves.

So then January of 2019 was like, okay. Now we just focus on student loans. And then fast forward three years, January of 2022, uh, we made our final student loan payment ever. Congratulations. Thank you. Thank you. 

Alan: And bring us up to date what's your real estate portfolio look like? 

Josh: Yeah, so we um, we own the two duplexes.

Uh, both were house hacks. We still live in our second house hack. Um, and then actually earlier this year was our first year going into the realm of using private money and the BRRRR strategy. And so in April we actually closed on an off market tripex using private money and BRRRR and, uh, then we subsequently REFI that building out of the private money into a nice 30 year, 7% fixed rate loan.

And so, as it stands today, we have a total of seven units. I say 

Alan: time and time again, try to put as little of your own money into deals. And if you run outta money, then you gotta get creative and find other ways to get deals done. So private money is just, we found someone that's gonna lend us money. It's, it's, it's just a person who's lending money that's private money.

BRRRR is just B-R-R-R. Typically, a BRRR strategy is you buy something at a discount, you renovate it, you rent it out, you refinance it, get all your money back out because now it's worth more, and then you repeat, you go do it again. So let's dig a little bit deeper into this private money BRRRR strategy. Josh and Ali found

for their most recent 

Josh: acquisition. We're big fans of being intentional when using social media and then always trying to solve problems. And so, um, two years ago we actually met, uh, kind of an older couple who we knew were involved in real estate. And they kind of had like a unique problem that we felt equipped to help solve.

And so we focused on doing that. And in doing so, um, we started having conversations with them about real estate and our goals, etc. Eventually, when we let them know that we were interested in buying more real estate. They said that, well, um, if you're ever looking for a private money lender, we see everything you guys are doing.

We think you guys are good you know, we good people to partner with. Just let us know. And we didn't really understand private money. We just thought it was a really nice gesture. Um, and then, uh, we stayed in contact with them. And earlier this year, um, we looked at some deals, some were kind of tough and outside of our scope, but then we found a really good deal actually in the end of February.

We met with the owner and at that point we then let our private money lender know, Hey, we found this deal. Um, they were kind enough to walk with us, see the property, and then we submitted an all cash offer pretty much within, you know, 10 days after seeing it. And then subsequently closed at the end of March.

Okay, 

Alan: so let's get into this all cash offer. Yep. Really, it's your investor paid for it all in cash and they're gonna charge you what in order to lend you this 

Josh: money? So we paid, we paid 12% interest, which was a lot higher than we had hoped for. Um, and we paid two points at closing. So if people aren't familiar, um, we paid $185,000 for the property.

And so two points is 2%. So call it like 3,600. Plus we had some closing costs for attorneys title, et cetera. We inherited one tenant, but two other units were vacant, but luckily, we're not like Chip and Joanna Gaines over here. We don't buy big, heavy rehab properties. It was an owner-occupied building for 12 years and they did a great job of keeping up with it.

Ali: This property was turnkey. We paid, we like $600 on paint and some new locks. It was really like not a heavy lift for this, so we got it occupied. We started the refi process and you know, we got this property for $190k and we had estimated like, we think it's gonna appraise for like minimum like $235k, $240k, um, just based on the comps in the neighborhood.

But that first appraisal came in. And what did he appraise it for? 

Josh: $210k. Yeah. And I think it's shocking. It was at that point. Um, where we felt like underwriters and banks especially, were beginning to tighten up a little bit just because everything was shifting very quickly. When we closed on that property, we were getting quotes at like 5.5, 5.7%, 30 year fixed rate.

When we did our analysis, we're like, Okay, you know, it's more than 2.7%, but we can work with it, et cetera. That first appraisal came in about $20,000 less than we had estimated, which was scary and. Uh, the rates had jumped up again and now we are, now we are budgeting for like six and a half, six and three quarters.

Um, and so it was kind of that fork in the road where A: we could just take that appraisal, probably bring an extra $20,000 to the closing table to bridge that gap, which we could have done because we had the means, but it definitely would've impacted our other savings and investing goals. Um, or we could go back to the marketplace, find a new bank, uh, get a new appraisal, which the longer that went, rates continue to rise.

But we felt really strongly about all of the comps that we had garnered, um, and we felt really strongly about the property. 

Ali: So we took the risk and we ended up leaving our current bank and getting another appraisal with a different entity, and it came in at $240k. So that was like a huge relief. We were like, we did our numbers right.

It's all good. But it really showed us the power that like one appraiser, one person can have that doesn't understand the market that it. This guy was from two hours away. Yep. And like, we live and invest in this city. We know the market and he didn't. So that was really, really eye opening and our first experience ever having to deal with that.

Um, but when all was said and done, our total all- in amount for this property was about like 30 grand, I'd say. 

Josh: Yeah. And, and most of that was Private lending fees and then closing fees. We paid 

Ali: a, this was an expensive property in terms of the interest. It was private money, but it was a little bit like private or hard money disguised as private money, but that too was a good opportunity for 

Josh: us.

But if we had gone, say the conventional route and we would spend easily 25% down, we would've spent about $50,000. 

Alan: Right. Okay. So what, so this was a 12% loan, 0% down payment, two points. Was it a one year note? 

Josh: Uh, no six months. Um, well, six month minimum. If we had to extend beyond the six month, um, there would've been fees associated with it.

And at first, so this is April, and we're like, Oh, shoot, six months. That's totally fine. We'll Refi in October. It was when rates started going up, like 0.75% very consistently, which I was like, that never happens. And it was like 0.75, .75. All of a sudden our cash flow started getting crunched because the cost of capital was rising much faster than we had planned for.

So instead of going the full six months, um, we refied in three months. Um, now we did still owe an, an additional three months cuz there was a six month minimum carry. So we ended up paying that at closing. 

Alan: All right, so to quickly recap, they could have bought this property with 20% down, using $50,000 of their own money.

They found private money that would give them a hundred percent financing, and the deal was below market, and then they had six months, which they really narrowed down to three months to refinance it with a traditional route. And when you do a refinance, they make you leave 25% equity in the building.

Cuz that new appraiser said the house is worth this. They owe that they have more than 25% equity in the building. And that was a good 

Josh: learning opportunity as well, Alan. Cause like, I mean, we had lenders who said, No, we can't work with this because it's not until six months. And, and we said, No, we, this is the information.

And then we had a, a mortgage lender. I'll get back to you on that. And then he went and spoke with whoever he had to speak with and he came back and he was like, Upon speaking with X, Y, and Z. Turns out, yes, we can do that note. Right? Um, and then, uh, yeah, so we, we refied, uh, in July. Um, what's nice too is a lot of times I think people like, it's either way you're solving a problem, you're either solving like a structural problem with a building, meaning it's like a heavy rehab.

Or what we try to double down on is how can we solve a problem for the person attached to that building? The owner had a town home, wanted to close on it, wanted to close quickly, and was sick of being a landlord. And we could close very quickly, a hundred percent cash, no inspection, no contingencies. Um, and that solved the problem for them, and we believed in the property long term.

Alan: And you solve the hard money lender's problem, they've got cash that they wanna earn 12% on for six months. Yeah. 

Josh: And they were, they, they're retirees and they're seeing the stock market down 22% and their bank's giving 'em 0.08% and their inflations are eroding their capital. So we dealt, we can solve those problems.

And I think a lot of times people just focus on the property and they forget all of the people. And sometimes people problems can be easier to solve, at least for us. 

Alan: I mean, what I'm hearing is your success is built on pure perseverance. Like someone tells you this is the mortgage rates. You don't just accept it, you know, this is what it's appraised at.

You don't accept it, and we don't have money to buy real estate, but you're still talking for sale by owners. Like, that's, that's the attitude to really change your life and transform your life. So kudos to you. What, where, where did you guys learn to. Keep being a bulldog on these things? 

Josh: So that's all Josh.

Yeah. Well I think cuz I think if you are born into abundance and you have. All the money that you need, all the resources that you need. I think that can be a great thing if used intentionally, but I think it can also undercut a person's ability to be perseverant. Um, I had nothing. I grew up incredibly, incredibly poor, um, you know, bad situation, et cetera.

So all I've ever known is how to go and get the things that I needed to get in order to get where I wanted to go. And rarely was it like "you have the money." I could always outwork people because that was all I ever had. That was the only resource I had. And so all of that over the past 20 some odd years before we got into real estate,

like that was the muscle that I learned how to work. And frankly, it was a bit out of necessity. And so that parlayed really nicely into real estate where I think a lot of times people have that limiting belief of, "I need a lot of money," or "I need a lot of knowledge," etc. and we didn't have either.

No, frankly. Um, but we knew that there were means to solve them. And one of the reasons I think we like real estate so much is that like it's proven, it's not some widget or some app and you're hoping it does well. All of the knowledge is out there. You just have to have the commitment to go find it. And especially with podcasts and apps and social media, et cetera.

All of the knowledges is there. And so we went out and found it and then this year that limiting belief of like, I need money to buy real estate. That's only half true. You do need some level of money to buy real estate, but that doesn't mean it has to be your money. And that was big for us. 

Alan: Josh and Ali Lupo @theFIcouple online follow them.

Yes. Real estate takes hard work. Look at hard work over time in their case four years. A hundred thousand dollars of student loan debt. Imagine that burden off your back, that feeling. You gotta feel lighter in your shoes. No doubt. When you buy another piece of real estate and now you have no housing expenses, you can become an entrepreneur.

You can thrive, you can breathe again. Real estate has the power to change lives. Thanks for tuning in to The Real Estate Maximalist. I'm your host, Alan Corey. Follow me. @RealEstateMaxi on Twitter, and I'll see you next week.