Henry:
Anyone can invest in real estate. You don’t need a fancy degree, a big bank account, or a high paying job to get started. Arden Williams and his wife were both making just $12 an hour when they bought their first house. So how’d they do it? They got uncomfortable. They slashed their expenses and they threw every extra dollar toward a down payment. Then they brought that same approach to real estate investing, jumping from one house hack to the next and sharing space with multiple tenants. But these small sacrifices paid off in a big way. Today, Arden owns three rental properties and he just broke ground on his first ADU, but that’s not even the best part. With this simple strategy, Arden and his wife quit their jobs and used their rental income to fund a year-long trip around the world. Whatever financial freedom means to you, retiring early, spending more time with family, or following your passion, real estate can make that possible.
And in this episode, Arden will give you a repeatable blueprint for building the life you’ve always wanted. What’s going on, everybody? I’m Henry Washington, co-host of the BiggerPockets Podcast. And today we’re bringing you an investor story with Arden Williams from Wilmington, North Carolina. So let’s jump in. Mr. Arden Williams, welcome to the BiggerPockets Podcast.
Arden:
Thank you. Thank you. I’m honored to be here, honestly. Why
Henry:
Don’t you tell us a little bit about your background and how the heck you got into real estate in the first place?
Arden:
Back in 2017, I graduated college and after college I didn’t really have much of a plan besides all I wanted to do was travel and be outside. Still something I do today. So I ended up getting a job out in Hawaii and worked there for about six months and then somehow found my way to the US Virgin Islands where I ended up moving there with my now wife. And then after COVID, we decided we needed some stability and I ended up getting a job as a firefighter in Wilmington, North Carolina, where I am today. So November of 2021, I was finishing up the fire academy and at the time we were both making like 13, $14 an hour, if that. And me and my wife ended up getting a house and ended up house hacking it with two of my fellow firefighters.
Henry:
Did you purposefully buy that deal as a house hack investment because you had been researching real estate or did you buy a single family and house hack it because that’s what you needed to do to be able to afford a place?
Arden:
Maybe a little bit of both. Back in Hawaii, I found a YouTube video of Brandon riding out buy a house every 10 years, one house every year, and ended up just kind of having it in the back of my mind of like, “That’s a great idea. Should probably look at doing that.” I remember telling my wife about it. I was like, “Hey, we could just get roommates and we’ll save a bunch of money. And if we want to rinse and repeat this, we could and hopefully continue to go and travel and do all the things we love to do.” We were basically breaking even on our mortgage with just our two roommates and it worked out great for us.
Henry:
So there was some intentionality in the kind of home you selected because I assume you planned on keeping it after you moved out.
Arden:
Yeah. So we pretty much only look at three bed, two bath, single family homes in our area for our price point. That’s kind of all we could afford. So we ended up getting it for 285, which was 20K over asking at the time, which we though we were absolutely insane, but it was 2021. It was
Henry:
2021. That was the game
Arden:
You had to play buddy. Yeah, it was the game we had to play.
Henry:
What’s your interest rate though?
Arden:
We got 3%.
Henry:
Okay, that’s awesome. So 285, paid over asking was a little scary. Got a 3% interest rate. Boo. Yeah, that’s amazing.
Arden:
Yeah.
Henry:
What was your mortgage payment?
Arden:
So at the time, I think it was like 1300 something.
Henry:
Did you put 5% down or did you put 20% down?
Arden:
So when we left the US Virgin Islands, we had saved up a good amount for our down payment. So it wasn’t our plan to save it. We were just both, me and my wife are really frugal. So we ended up putting down about $30,000 actually.
Henry:
What were you renting each room out for?
Arden:
So since they were my friends, I was trying not to gouge them on prices, but I think we ended up renting both out for about $700 a month.
Henry:
So you’re living for free essentially?
Arden:
Basically. I think we ended up basically just paying the utilities, insurance, and stuff like that.
Henry:
That’s really cool. That’s the whole point of a house hack. Well, that’s half the point of a house hack. The second part of house hacking is it’s only financially beneficial if you don’t let life creep come in. So in other words, you’ve got to pretend to pay yourself rent or mortgage so that you can actually realize the savings, not just absorb it into your lifestyle. Awesome. So that was 2021. House hack, conventional mortgage, put about 30,000 down, obviously living for free. I assume you moved out and kept it. So what kind of rent does the entire house pull in now that you’re not living there?
Arden:
Yeah, so we actually just lost our original tenants from three years ago after we and my roommates moved out. They just left and so we just got new tenants and they are renting it for 2,450 a month. Our mortgage has gone up to about 1,550 a month with insurance and taxes and hurricane stuff. That’s
Henry:
Still pretty cool. I mean, debt service of 1,550, but that includes taxes and insurance and you’re bringing in 2,450. So that’s a $900 surplus if you count a little bit for maintenance and some expenses. That’s a decent amount of cash flow for a property that you just buy on the MLS that you got to live in for free. I’d say that’s a win.
Arden:
Yeah, we’re very happy with that house.
Henry:
I’m curious to know how that led to your second deal and how different those deals are, but we’re going to dive into that right after the break. All right, we are back on the BiggerPockets podcast. I’m speaking with investor Arden Williams who successfully pulled off one of my favorite strategies, which is the house hack. I house hacked when I first got started. It was absolutely game changing. So I love hearing stories of people house hacking. So you pulled off your successful first one, you bought a three bed, two bath, paid 285. You’re pulling in about 900 bucks a month in cash flow now. Did you do it again or did you change strategies on your next one?
Arden:
We basically did the exact same thing.
Henry:
How long in between them? Was it a year, two years? How long did it take you?
Arden:
So it took us about a year and a half. So we bought November of 2021 and bought our next one in July of 2023.
Henry:
All right. Tell me about this one. Give me the stats. Beds, bath, square footage. What’d you pay?
Arden:
We have a 3-2, 1,100 square foot house downtown Wilmington. Nothing super special. It’s actually 123 years old now. Oh
Henry:
Wow. Yeah.
Arden:
Remodeled, paid 325 for it. I think at the time we had a 6.8% interest rate, but then we did something really silly about a year later, but it came with an additional lot.
Henry:
Oh, dope. I love deals like that.
Arden:
I still feel like I overpaid for that house, but then I have to remind myself that I got a lot basically for free because when we split it, they valued it as we paid like $5,000 for it and there’s lots that size are selling for $70,000 now.
Henry:
Oh yeah.
Arden:
Right now it’s funny because when we got it appraised when we first bought it to when we got the Zestimate now, it’s almost the exact same, but that doesn’t have the allot attached anymore.
Henry:
That’s super cool. Sweet. So you paid a little more for this one, 325, 6.8% interest rate for the time being. Who’d you get to live in the house with you and your wife this time?
Arden:
We had a friend of a friend move in and then we found random one we put up on Zillow and we had them both renting from us. I think one was $800 a month and the other one was $700 because one was a smaller bathroom.
Henry:
Okay. And so what was your debt service on that mortgage?
Arden:
So we ended up putting a lot down on that one. We saved as much as we could from the last house hack. We knew that interest rates had gone up. I didn’t realize how big of a deal that was until after we bought this one. And we ended up putting like $52,000 down. I think at the time it was around a little over $1,900 for the mortgage.
Henry:
Looks like you were bringing in 15. The mortgage was 19, so you had to pay a couple hundred dollars a month this time. But still you got an additional lot. So I love that you repeated it for your second one. Even though you paid a little more, you had a higher interest rate, you had high debt service, you were still able to offset your income, you were only paying a couple hundred dollars a month. On this one when you moved out, were you able to rent it for a similar amount to the other one or is this one rent for more because it’s downtown?
Arden:
So it rents only for a little bit more. We’ve had the same tenant since we left. Now they’re great. I’m also a realtor now as well. And they’re my clients and they’re actually looking to purchase a house now, which is a shame because they’re great tenants.
Henry:
You’re like, “Oh, I’ve been looking. I just can’t find anything for you guys. I guess you have to
Arden:
Stay for them.” So they paid $2,500 a month, but it has gone up. We did the silly thing of refinancing.
Henry:
Did you pull cash out?
Arden:
No. So what we did is, so we had to split the lot off.
Henry:
Oh, got it. So you got a
Arden:
New home
Henry:
And you did the lot split.
Arden:
Yeah. So we ended up splitting it and we didn’t really think… Again, we were like, “What’s one point? That’s not going to be anything.” So we split the lot off because we were going to build on it the next year. That was our plan was to build and then move on.
Henry:
Can I give you a piece of advice? Do not do the math on what the price difference is in what you’re going to pay over the life of the loan when you paid that extra 1% interest versus where you were. Just don’t look at it. It’s
Arden:
Done. Yeah.
Henry:
It’s done.
Arden:
Yep. Yeah.
Henry:
Okay. So let’s focus on the good part. The good part is another successful house hack. I assume you were just finding these on the market with an agent. You buy them. I like that you’re putting a substantial amount of money down because then you’re essentially manufacturing cash flow, you’re buying equity. And then I love the back-to-back house hack method, and I’m very curious what the next deal looked like.
Arden:
Yeah, so the next deal was actually a little different. So we actually decided to do a flip, reno, burr kind of live in flip was ultimately what it was.
Henry:
Hey, again, I think this is another great owner occupied strategy, but it’s not as cut and dry as a buying a house hack because now you have to figure out how to take on a renovation. You have to figure out how you’re going to fund that renovation. Did you have a plan in mind of what size of a renovation you wanted to take on ahead of time? Did you know what you’re looking for or were you just perusing, hoping to find something you thought might be decent?
Arden:
We wanted to do a cosmetic flip. So we wanted to do floors, paint, and then there was a… It’s actually the room I’m in now. There was a wall literally right where the computer is, and we just wanted to tear that down, but we did get a contractor for that one. And then we ended up adding some projects on and now I’m redoing the things that I didn’t know how to do the first time.
Henry:
Classic. Okay. So
Arden:
First
Henry:
Question, the obvious question is what did you pay for the property?
Arden:
So for the property, we ended up getting it for 270.
Henry:
Is it a three-two like the other ones or did you make it a three-two?
Arden:
3-2. This one’s about the same size, 11, 1200 square feet. And it’s on a half acre lot in Wilmington, which is pretty rare. Oh
Henry:
Wow. That’s
Arden:
Pretty cool. Which is going into our next strategy with this house. Actually, we just got a permit to build an ADU on the back.
Henry:
All right. So you paid 270. How much did you budget for the renovation and then did you stay on budget?
Arden:
So I think we budgeted $30,000 for a renovation and we actually did 25,000, just over 25,000.
Henry:
Nice.
Arden:
Nice. Half of that was just the contractor blowing out the wall and putting drywall on the vaulted
Henry:
Ceilings. Awesome. What kind of loan did you use to purchase this? Did you just buy it on a conventional and then fund the renovation yourself or did you use a 203K loan?
Arden:
30 year fixed.
Henry:
Because there are live-in flip loans. We’ve talked about them before. They’re pretty tedious, but are very helpful.
Arden:
Yeah. I just was listening the other day to one of those and I was like, “Well, that would’ve been good to know a year ago.”
Henry:
Okay. Okay. So you bought it conventional. How much did you put down on this one?
Arden:
So we ended up putting $40,000 down on this one as well.
Henry:
Great. So I mean, I don’t think there’s anything wrong with the strategy. I think if you’ve got the capital to be able to pull it off, this is a great way to do it. If you don’t have as much capital, yes, you can use things like a FHA 203K loan. There’s a home path renovation loan that either Sally or Freddie has that you can use. So there’s definitely options for you if you want to do a live and flip. This is cool because you’re kind of doing all of the owner-occupied real estate investment strategies. So it’s really fun to hear somebody that’s pulled that off. So have you had it appraised since you’ve done it? Do you have an idea of what it might sell for if you were to sell it soon?
Arden:
So we actually just got appraisal done for the HELOC for the ADU that we ended up pulling out and it appraised for 300, which I was less than thrilled about, but I’m long-term investor, so I’m not planning on selling it anytime soon.
Henry:
Okay. So it appraised at 300, you’re all in just under 300. But for the people that are listening, on paper, he’s all in for less than that because the renovation money was your own money and you put $50,000 down. So your actual loan balance is lower than 300, but in real dollars, you’re in it about 295.
Arden:
So
Henry:
When you say you were able to appraise for enough to do the HELOC, you had equity, you have equity because of how much money you put down and because you funded the renovation out of your pocket.
Arden:
Yeah.
Henry:
All right. So it’s on this half acre lot. You said you have started the process of doing an ADU. Did this come up after you bought it when you realized the potential or did you see the potential for ADU when you purchased it? Because this was, it looks like 2024. ADUs were just kind of becoming a thing around then, well, popularity-wise.
Arden:
Yeah, so it wasn’t really the original idea. I was probably listening to BiggerPockets and I probably heard something come up about it and I was like, “That’s a good idea.” And shortly after the city of Wilmington changed the zoning rules that basically almost any lot in Wilmington can build an ADU. So I was like, “Game on.”
Henry:
Where are you in the process of building the ADU?
Arden:
We actually just got our permit today.
Henry:
Oh, wow.
Arden:
So I have to go tear down a shed and get the lot opened up for it.
Henry:
What are the steps you had to go through to get to essentially the step where you are today? Because I am willing to bet there are tons of people listening to this episode who either are interested in buying a house that has a lot where they can put an ADU on it or probably already have property and their city is now allowing them to build ADUs and are pretty curious about how the process all works. Now keep in mind everybody, every city municipality is going to operate a little differently. So just because this is the way Arden’s done it doesn’t mean it’s going to be the way that you are going to be able to pull it off in your market, but I think this will be still helpful. So you’ve got the house, it’s sitting on a half acre lot, you know you can do an ADU.
What was your first step?
Arden:
Yeah, so the first step is really one, just determining whether or not you can build because at least the way Wilmington works, it can’t be bigger than half the size of your main structure. So if you’re going to build a 300-foot ADU, it’s kind of nothing to it. Next is quotes. We talked to, I don’t know, every general contractor in town who does it and then some specific ADU companies now that it’s been our thing for about a year, there’s a few companies I’ve opened up and we talked to all of them, got quotes from all of them, and finally found one that we just meshed with the best, wasn’t necessarily the cheapest, but just seemed like the highest quality for the best price. Next is their site planning. They have to figure out exactly what they need to do, if there’s utilities that are going to need to be ran or where that’s going to come from.
And then from there, for us, it was financing, figuring out exactly how we’re going to get the funds. Is it going to be cash? Is it going to be a HELOC? And then from there, at least in my book, the third party company has really taken it on to go to the city, get the permits and all of that. So for us, hopefully now it’s just choosing the color of the cabinets.
Henry:
Yeah. Well, that’s the benefit to hiring a third party to do it. So if you’re shopping around for third parties to do it, finding a contractor who’s going to go fight all the battles with the city and get the permits for you is definitely the way to go. And I like that you got multiple bids from multiple contractors. When you were getting bids, did you already have to know your floor plan or what you wanted to build when you were going to these people? Or did you just go to them and say, “Hey, I have this lot. I can build an ADU. Can you show me what you can do or what I can do here?”
Arden:
Yeah, so I knew about the rule of ADUs. I looked into it, especially with our other lot. I was looking at what we could build there and found the ADUs. Funny enough, I actually stole one of the ADU guys’ free plans that was on the show and took it because it fit almost perfectly in our lot. Oh, man. We ended up having to not go with it because it was a little more expensive than what we wanted to spend. But I took them that plan and was like, “I want something roughly this size and I know it needs to be under 600 square feet.” And then they would come back with a quote on exactly that plan or exactly a plan that was the most similar to it. Most of them had a plan that was close enough. Oh,
Henry:
That’s pretty cool, man. Shout out to Derek, man, the ADU guy on Instagram. If you haven’t checked out what the ADU guy does, he’s such a great resource for being able to build ADU. See this is what he does for a living. He’s been on the BiggerPockets podcast. Great resource. Sweet, man. Thank you for taking us through that. So now you’re at the step where hopefully you can break ground soon, it sounds like. So do you have a timeline on when you expect it to be finished?
Arden:
So they said 150 days from permit, so 150 days from today.
Henry:
Hey, start the clock.
Arden:
Yeah, start it right now.
Henry:
Okay. And do you mind sharing the specs? How big of an ADU, one story, two story, and what’s the total build going to cost?
Arden:
So the total build is going to cost $128,000.
Henry:
That’s amazing.
Arden:
Yeah. So I think it has to be exactly 570 feet, but that doesn’t include the outside area. So we have two outside patios we’re putting, front and back, and it’s going to be a one bed, one bath.
Henry:
Is it like a studio or is it going to be actual bedroom, bathroom, living room?
Arden:
Actual bedroom, bathroom, living room. And right now, one bed, one baths in our area, at least rent from 14, $1,500 a month.
Henry:
That’s cool.
Arden:
Yeah.
Henry:
The next question is the question everybody wants an answer to, which is how the heck did you go about financing this thing? Because that’s the struggle I think people have with building ADUs is there’s not a lot of ADU specific loans out there yet. I think we’re going to get some of that in the future as this becomes more popular, but right now you kind of have to figure out how to bootstrap the money to do these builds. So I’m guessing that’s what part of that HELOC was for, you know?
Arden:
Yeah, so we ended up getting a HELOC for about $45,000, and then the rest is on us. Okay. I don’t really have any other magic way of getting money. Yeah, no,
Henry:
That’s the thing people need to hear. It takes capital to do this, and I would encourage anybody who’s curious about this is don’t just research ADUs, but research any loan programs, grants, help from your cities or municipalities. There are options out there to help supplement some of the financing, but if you’re building an ADU on a property you already have, it’s going to take some cash. You’re going to have to shell out some money to do it because there just aren’t a ton of loans out there for this
Arden:
Yet. We’re actually in talks about getting a roommate again, so we’re going right back to our original strategy of, all right, if we’re here, we got to have a roommate.
Henry:
Yeah. Okay. And do you have any concept of what the entire property might appraise for after it’s all said and done?
Arden:
What I’ve seen is about 70% of the cost of the ADU seems to be added to the home, which would put us probably roughly at 380, 390, which that’s the hard part, but we’re realistically going to be making almost a thousand dollars a month in rent just from the ADU.
Henry:
If your goal is to rent it out and cash flow it, you will absolutely be cashflow positive because you’re going to be able to get around $1,200 a month on the ADU, plus you’re going to be living in the house, so you’re going to be able to have less of a mortgage, especially if you get another roommate. And then if you move out down the road or when you move out down the road, you rent the house, you rent the ADU, and you’re super cashflow positive. So I think that that works. You have to understand real estate’s not a short-term gain. It’s a long-term play. And so in the future, your equity’s going to continue to build, your debt service will continue to go down. I don’t think that that’s a bad thing at all.
Arden:
Yeah. And we actually have an alternative strategy that if depending on finances, we’re actually debating moving into our ADU and renting out the main house because it’s more expensive.
Henry:
All right, Arden, thank you for sharing that story and thank you for being so transparent. I do have a few more questions for you. I want to dive just a little bit into this concept of living frugally and living a little uncomfortably in the short term so that you can truly live the life you want to for the long term, but we’re going to do that right after the break. All right, we are back on the BiggerPockets podcast. I’m speaking with investor Arden Williams, who has pulled off two house hacks and now a living flip and is now taking on an ADU. Before we get out of here on the investment side, I want to talk a little bit about this concept of living frugally. What did living frugally look like for you? What kind of sacrifices did you make in your lifestyle? And then how has making those sacrifice manifested itself in your life now?
Arden:
Living frugally has been probably one of our key strategies. I have a great wife who’s also just as frugal as I am and very conscious on money. She’s our spreadsheet guru, so she tracks all of our spending, which is amazing. We’ve had lots of different ways of just saving a little money. Some of them I don’t recommend at all. House hacking is probably actually the least uncomfortable because if you find someone who you actually generally get along with, it’s not that bad. It could actually be a lot of fun. Doing a live in flip is probably the next step into rough. You come in, your kitchen’s destroyed and your floor is destroyed and the only thing you can do is work after you get off work. That’s not great. But other than that, we’ve always been very mindful on what we spend eating out. And then there for about four years while I was a firefighter, I strictly drove a motorcycle, rain, shine, snow, sleet.
That’s intense. Yeah.
Henry:
Did you have any rules of thumb you lived by in terms of how much you were spending in relation to what you were making? And remind everybody that’s listening, what were you guys making when you first started this real estate investment journey and what were you spending versus what you were making?
Arden:
At the time when I first started, I was making 12, $13 an hour as a firefighter. And then my wife was at the time a teaching assistant and making 12, $13 an hour. And now both of us make roughly about $60,000 a year, so not crazy. We don’t really have a key target that we follow, but we mostly just really focus heavily on not eating out. That’s our biggest, that’s the hardest one for us.
Henry:
People ask me what I do. I eat all my money, guys. That’s what
Arden:
Happens. Yeah. So the big thing is just figuring out what works and the things that you want to spend your money on, and then just trying to limit the things that you’re like, “I don’t actually need this.”
Henry:
And I think the other thing that keeps people from living frugally is this fear of missing out on the fun parts of life or the things that you enjoy. After living frugally for so long, do you feel like you’ve missed out on life or missed out on adventures or missed out on experiences?
Arden:
No, not at all. So between the time we got our first property to the end of 2024, we had three houses. We ended up renting them all out and we actually got just off the money that we were making, we ended up getting to go travel the world for almost a year.
Henry:
That’s really cool. So while both making 60,000 a year?
Arden:
No. So we both quit our jobs.
Henry:
Just traveled?
Arden:
Yeah.
Henry:
That’s super frugal.
Arden:
So after traveling across the country, we were like, “We want to do something cool every five years.” I don’t know if that’ll stay forever, but it just happened to be right at five years. We ended up being like, “Okay, this could be our last chance to do a big adventure.” And so we just saved and saved and saved and saved and saved, cut as many expenses as we could. And this was also during the renovations. So we’re renovating the house, trying to save money because we knew we were going to quit our jobs, and we ended up just saving as much as we could. And then the income we were making from just three properties was enough to cover half of our year of travel.
Henry:
I love it, man. I mean, this is why people invest, right? Being a little uncomfortable so that you can invest in real estate allows you to bring in an income that allows you to live the life that you want to live. And I love that you are the walking embodiment of that. This has been really cool. Before we get out of here, why don’t you give us just a quick recap of what your total portfolio looks like? How many units?
Arden:
Yeah, so all we have is three single family units, and we’re breaking ground on an ADU, hopefully in the next week or two, and we’ll have four units and a piece of dirt.
Henry:
And I like that. And you started in 2021. It’s now 2026, so you didn’t have to scale super fast. You’ve been able to enjoy your life. What are the plans for the future? Are you going to do more real estate deals? Are you going to house hack again? It sounds like you might not do another live and flip, but
Arden:
What’s the plan? Yeah, we’ll see about that one. That one will probably be the hardest to convince my wife of. Yeah, so the plan, definitely to keep doing real estate. I just got my real estate license back in February, so it was mostly for me and my wife in case we wanted to sell something, save us a little money. But I also really enjoy talking to people about this. And a lot of our friends who know us and know what we do have asked us questions about it. So it’s something that we’re definitely pushing. And then realistically, my goal is six to 10 properties. We self-manage everything, so we don’t want a huge headache all the time. Anything more than that, I don’t really need. I’m just looking to make enough money that I can continue to do the trips I want to do and just try and live a little bit.
Henry:
All right. Well, thank you so much, Arden, for sharing your journey, for sharing your experiences. What I love about your story is it is such an achievable path. Anybody can go down this route. You should be proud of what you built. And again, thank you for being open and honest with us and sharing your journey. And I wish you nothing but success as you continue to grow and scale your business.
Arden:
Thank you so much. It was great talking to you.
Henry:
And if you’re listening and you think you’ve got a pretty cool story you’d like to share on the BiggerPockets podcast, then go on over to biggerpockets.com/guest and fill out the form. We could select you, and before you know it, you could be right here on the podcast with Dave or I sharing your story for the benefit of our BiggerPockets community. Once again, thank you everyone for listening to the BiggerPockets Podcast. We’ll see you on the next episode.
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