547: Using "ADUs" to Go From Firefighter to FIRE by His Late 30s

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 19 July 2024

⏱️ 68 minutes

🔗️ Recording | iTunes | RSS

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Summary

You could be missing out on the chance to earn passive income from your home (and other rentals!) with a “no-brainer” money move. This investing strategy is picking up steam and could become one of the big trends in real estate this year. Today’s guest was one of the early adopters, and it carried him to FIRE by his late thirties! Welcome back to the BiggerPockets Money podcast! Today, we’re chatting with “That ADU Guy,” Derek Sherrell. Right before the 2008 housing market crash, Derek left his contracting job behind and returned to school to become a firefighter. Little did he know that this career move would provide the time, freedom, and connections to launch a full-blown side hustle alongside his W2 job. Before the age of forty, Derek became financially independent, with the ability to retire early, all thanks to this simple strategy. Since then, he has made it his life’s mission to inspire countless others to do the same! In this episode, we’re taking a deep dive into accessory dwelling units (ADUs). Tune in to learn why the combination of serial house hacking and some kind of “secret sauce” (in this case, ADUs) is perhaps the easiest path to FIRE. Derek will tell you everything you need to know about buying, building, and renting out ADUs—from financing these units to scaling your business! Support today’s show sponsor, BAM Capital, your path to generational wealth with premier real estate investment opportunities! In This Episode We Cover Accessory dwelling units (ADUs) explained (and how they create passive income) Why the modified serial house hacking strategy might be the easiest path to FIRE How to completely replace your W2 income with cash flow from ADUs How to easily (and affordably) convert a single-family home into a duplex Why ADU investing could be one of the biggest investing opportunities in 2024 How to get your spouse on board with your real estate investing strategy And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott on BiggePockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders Property Manager Finder Check Out Derek’s Website Derek on BiggerPockets 00:00 Intro 02:31 Life with FI & Current Portfolio 06:06 Derek’s Money Journey 12:26 Changing Careers & Building Wealth 18:21 Buying the “Lucky” House 28:14 House Hacking with ADUs 37:20 3 ADU Investing Strategies 49:06 Derek’s BIG Mission 55:58 Connect with Derek! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-547 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Building an ADU, especially in the context of house hacking, may be the new no-brainer way to move towards fire,
0:07.2	especially for those getting started on their journeys.
0:09.8	Hello, hello, hello, and welcome to the BiggerPockets Money Podcast.
0:12.9	I'm Scott Trench here today with myself.
0:16.6	There will be no additional host unit dwelling on today's podcast.
0:21.6	BiggerPockets has a goal of creating one million
0:23.2	millionaires. You are in the right place if you want to get your
0:25.6	financial house in order because we truly believe that financial freedom is
0:28.6	attainable for everyone no matter when or where you're starting. Derek Cheryl is an early retired firefighter
0:36.0	who has three letters that he hopes
0:37.8	you will remember on your wealth building journey.
0:39.8	Those letters are A, D, and you.
0:42.0	Big surprise there.
0:43.2	We're going to talk about those in this.
0:45.2	This is a huge opportunity for a lot of folks
0:47.6	in at least four states.
0:49.5	Essentially all of the state has been rezoned to allow ADUs. Those states are Oregon, Washington, California, and Montana.
0:59.0	And then Colorado's following suit, there's a lot of states that are basically wanting to increase the housing stock in their
1:05.4	states by allowing construction and one of the easiest ways to do that is to allow the construction
1:09.4	of these additional dwelling units.
1:11.4	I don't think that we don't have official data on this but I do not think this trend is really
1:15.6	being getting fully baked yet so it's an opportunity for entrepreneurs.
	...

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