House Hacking for Beginners: Funding Strategies, Building Equity & Historic Property Revitalization (House Hacking Edition)

With a new year underway, many aspiring investors are looking for the smartest way to break into real estate, and house hacking remains one of the most powerful ways to get started.

In this episode of The Rent-ish Podcast, we’re joined by Cincinnati-based developer John Blatchford to walk through how first-time investors can use house hacking, creative financing, and smart renovations to build equity from day one.

While this conversation was originally recorded on July 21, 2025, the strategies John shares are evergreen and especially relevant for anyone planning their first move into real estate this year.

We cover how to fund your first deal, what to look for in a property, and how to turn a single home into the foundation of a long-term investing strategy.

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Transcript

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This episode with real estate investor John Blatchford was originally recorded on July 21, 2025. With the start of a new year, we wanted to bring it back because the house hacking, financing and renovation tips John shares are especially valuable for anyone looking to kick off their real estate investing journey in 2026. What's going on everybody? I'm Zach and I'm here with my cohost Patrick. What's up? We are your hosts for the Rentish Podcast, which is a podcast kind of about rental properties and hosted by two guys that work in the real estate industry and kind of know what they're talking about. That's right, Patrick, mostly we don't, but we might have someone here who does. Spoiler. We'll get to it here in a second. But you're have fun hearing us talk to experts and learning with us or laughing along at how little we know along the way. Rentish podcast, follow us, do the things. We talk about it every single week, right? Anything that you can do. We appreciate you for listening to the show. If you've gotten this far in the episode already, we really thank you for coming around and listening to the show. It's been really fun doing this podcast with Patrick and all of our guests. And follow us on Instagram at The Rentish Pod. You can email questions at TheRentishPod.com if you have a question. or comment that you'd like to share with us, or maybe just a topic suggestion, advice for fellow renters or people that are interested in real estate and property management, or if you're a esteemed guest or maybe someone famous and you wanna be on the show, email us. We'll thoroughly vet these, I'm sure. Yeah, that's about it for the podcast. Patrick, how are you doing today? I'm good. I'm full of energy. Yeah. Yeah. Can't you tell? Yeah, I can tell. I mean, you're very, a twinkle in your eye. You're ready to rock and roll. Well, we got a special episode today. We're not gonna do the typical rigmarole here at the top where we talk about Superman and the fact that it's coming out in a month, but we're gonna talk with a very special guest. So in this real estate investing series, we're gonna be diving into a strategy that's all about turning your living space into an income stream. It's called house hacking. apparently. This one's especially popular with younger investors, first time home buyers, or anyone looking to ease into real estate without tacking on a ton of risk. The idea, buy a property, live in part of it and rent out the rest to cover your mortgage or even turn a profit. And to help break us, help us break it down. Lots of new words here, lots of new words. To help us break it down, we're joined again by John Blatchford from Cohorts, who was here a few weeks ago to talk to us about buying new properties and renovating them, and he's gonna walk us through what house hacking really looks like, how to make it work, and who should or shouldn't try it, and judging by how rough my intro was there, I would say maybe we shouldn't try it. But we're gonna learn about it. John, thank you for coming back on the podcast. What's up fellas? I don't Also, yeah, that's a day well caffeinated and everything's good. Yeah. That's good, that's good. Yeah, I think we're all in the caffeination department. think I've had uh a half pot of coffee and a soda, so I'm ready to rock That's the problem. I haven't No caffeine at all? I that's what it is. I was gonna make I've been doing Earl Grey tea with honey. That's been my thing recently. And I heated up the kettle and I realized now I forgot to pour it in the in my mug. The producer was just in the room asking you if you wanted a drink and you declined. I didn't decline. said yes, and he said too bad. uh they want. I think you're wrong. I think I heard you say no. I'm good I said, I want one. You miss her. I misheard, John, educate us. You're here to talk about house hacking. We're very curious to hear about what you have to say. We're here with OpenEars. I'm sure we're gonna have questions, but take it away. We kind of are just, uh we're your audience today. This is your TED Talk. cool. Thanks guys. So yeah, I think we're kind of uh building on or continuing our series, which I think is effectively, how do you go from zero properties to whatever your dream is, say 100 units or 1,000 units? So we talked about my first property recently and kind of how I got into it. And hopefully, from all the mistakes I've made, can help people not make those mistakes. But this is a good way to get started, this topic of house hacking. And I think the general idea is, you know, if you are working at a job and you want to get into real estate, you know, what is the pathway to do that? And one consideration is like, what are you hoping to get out of that? Are you trying to ultimately become a real estate developer? Do you want to quit your job in 10 years? Do you want to just have some safe investment over the next 30 years? And I think that will kind of dictate what you want to do. But uh one like fairly low ballpark are fairly easy way to get into uh real estate is this idea of house hacking, is basically, instead of just buying your house, which can be a great lifestyle choice and can be a good long-term investment, turning that house or property you buy into something that can make you some money. Or at least that somebody will pay to live there and can pay your mortgage. So this idea of house hacking, think is basically, the hacking part of it sounds a little bad, I would say. Like, how do you hack your way in? That's cool. Like an 80s tech bro. I'm gonna hack this house. to the mainframe. But it's basically, how do you get money? How do get somebody to pay, you know, pay your mortgage or to pay to live in this house? And so, you know, I think there are different ways to do that certainly, but I think the first hack is that if a house costs $400,000, obviously you do not need $400,000 in cash to buy that. You know, that would be impossible. And so there's this first idea of just like, you can get debt, you can get a loan against your house and most people appreciate that when they get their mortgage, but a mortgage might come at like, 20 % down payment on the house or something. So even for a $500,000 house, you know, $400,000 house, need $100,000 in cash, which for a lot of people, you know, won't come until much later in life. Right. So one way to get into a house with less cash is, know, FHA loan. I've talked to a lot of people, good friend of mine, Donovan has done it and now built a really successful real estate business. But it's a way to sort of get started with say 5 % down. So in that same $400,000 property, you now only need $20,000. You know, a lot of people can work their way up to having $20,000 that they could invest. an FHA loan, can buy the property if it's your primary residence, you're going to live there. Okay. And you can make it a little better if you buy a duplex. So there's two units, you live in one and you rent out the other one. That's a place that you live at your primary residence, but it also has a rental component. And so you know, your tenants living there will be paying your mortgage. And so immediately you've basically, you know, moved into a house that's now, you know, it's not free, but somebody else is basically paying for your house. Right. So that's the hack, right? Because for now, uh a $400,000 property with two units, it's a duplex, you now are into it for $20,000. And somebody else is gonna pay that loan for the next 30 years, right? So that's like a pretty good way to get into real estate. That's the hack with John Blatchford. we trademark that? I like that. Like that's a great t-shirt. Like that's the hack. And then with John Blatchford on the back of the t-shirt. That's cool. sounds awesome. Yeah, exactly. that's one way, right? You don't have a ton of money, you know, you have a salary, you're just trying to like, okay, how do I start building some equity? How do I maybe start building for retirement? And that's one way to do it. You know, a ton of cash. The potential downside of that, of course, is you can't do that regularly. The whole program of the FHA is like your primary residence. So you're supposed to live there. I think you can only do one of those like once a year. And so that's the hack. You get into it and that's a good way to get your first property. FHA works for duplexes. Yeah, if it's your primary residence. Okay. Yeah. This is a safe space for all questions, whether they be the most intelligent, beautiful thing, or the stupidest thing Are you about to ask a terrible, stupid I'm about to ask a stupid question. What does it stand for? FHA. Fair Homes Act, think. And the intent of that program is our housing policy throughout time, throughout history has been fairly racist. Certain people, certainly black people could not get loans and home ownership was expensive. Historically, it would cost a lot of money, 20 % or 50 % of the home cost to buy a home. So to buy a $200,000 house, you need $100,000 in cash. So this program, it's a federal program where now you only need, say, 5%. to encourage home ownership for people that aren't already rich. And then you pay that off over 30 years. Yeah, 1934 Congress created the FHA loan little trivia fact. That's And then, know, and then depending where you are, depending who your lender is, you know, there are a lot of sort of like first time home buyer programs, you know, friends of ours through Wells Fargo years ago, you know, were able to buy houses, I think with even less money down. know, so there's really kind of creative ways that you can, especially by the place that you're going to live. And then the hack is like, and then you get a tenant. The extreme hack, which my friend did is not only did he have a duplex that he rented out one unit, he then in his unit had roommates who paid him rent. Really? Yeah. You know, and that's a pretty extreme way to do it, you know, maybe early 20s and so that's one way. That's awesome. That's very, cool. mean, like this is, I don't know if I don't want to speak for the both of us, Patrick, but like amongst all of my friends, like straight out of college, getting like big boy jobs for the first time, like right when you leave school, this was the most common tactic for home buying for, for most of my, close friends was we bought a property, we bought a duplex, we rented out one unit and we stayed in the other one. And then eventually once we felt comfortable with that, we bought a property that was just for the, for myself and my wife, for my partner. and then we rented out the other unit and now we have this investment property that's on the side. This is like the most common thing I think used by people in my age bracket for sure. I had my first friend to buy a house. was pretty much right out of college. He got some sort of, I don't know how, but he got a rent to own contract. Works really nicely for him. And then he had a roommate who paid rent to him, you know, to help cover that rent to own thing. And then I lived there for like two months and paid, you know, crashed his place for a sec too. But rent to own, not the, that wouldn't be the same thing as house hacking. It's house hacking specifically, like owning a property, living in that property, and then having somebody also live in that property paying. Yeah. Okay. That's what that's the term house hacking. So again, the hack is like, you know, anybody can buy real estate, you know, we can go out and buy a property, but the expensive way to do it is, you know, $400,000 property, you put in $100,000, you get a loan for the rest, you know, whatever. So the hack is really like, okay, it's your primary residence. You need much less cash and then you have a tenant. And I think the other good, like, assume you want to get maybe more into real estate is this. It's such a good, relatively low risk way to appreciate what it's like to have. a tenant to have maintenance issues, to maybe do a little light renovation, to redo the kitchen, you know, see if you can add value like, oh, someone might rent there for $700 a month, but like, what if you read it the bathroom, would they pay 750, you know, so you can start to like all the fundamentals, I think of real estate, you can get, you can start to get through that, you know, managing a construction thing, they maybe want to invest$5,000 into the kitchen over there and, you know, invest a little more there and just see what that's like. What's it like hiring a plumber? What's it like, you know, finding a flooring person? No, they didn't show up. Oh, they, they, took your money and ran like whatever like all the things that those are the exact same problems at a hundred thousand dollar project and a million dollar project you know like you start to get a taste for like what it is to right to own real estate manage real estate and do construction okay yeah so it's like a it's really nice lead in I think too oh always recommend house hacking to first time buyers or is there situations where that might not be the best idea? think as an investment, I think a mistake people make is viewing buying your primary house as this great investment. It can be a great investment, but you're still going to pay that mortgage every month. The roof fails and you have to fix that. You're really just hoping it gains value over time, which it has pretty much the last 20 years, but that's not necessarily a guarantee. So I think you should buy your primary house to be happy. You want it to be yours. It has the bedrooms you need, you can paint the kitchen and you know all that kind of stuff. Right. It makes you happy. But if you want it to be an investment, know somebody paying your mortgage, your loan every month like that starts to be a really great investment. Got it. Gotcha. Are there any local zoning considerations or legality that you have to consider when doing house hacking? you Yeah, so, know, again, I think the hacking piece, people think like, okay, I can do this here. And then, you know, I don't even have to live there and then I can do another one. And, you know, people try to get sneaky with that. And obviously, you know, you're taking money from the federal government. And so, you know, I think you need to be careful that you're like doing what the program intends, which is, you know, to buy and live in a home. then, yeah, anytime you're doing construction, if it's not already a duplex and you're turning it into a duplex, you definitely want to check that. Does the zoning allow for a two unit, you know, don't buy a property that's only a single family home expecting that you can maybe build an accessory unit or you can turn the attic into a rental. That's pretty highly regulated and if you get caught, like you have someone living in this fire risk attic. That's a pretty serious risk. someone that owns a lot of property and have developed property in Cincinnati like I feel like I have witnessed a lot of Some let's call them janky put how homes like old Cincinnati homes that been have been renovated into like three family units or whatever like I mean Do you see do you see this relatively commonly people like getting trying to get around it and like doing this sort of stuff with house hacking? Yeah, and you know there are It often does happen that historic buildings don't need to meet current building code. Like that is allowed some of the time. Like for example, buildings we renovate where the stair handrail is lower than the current building code, but they don't make us match the current building code because it's a historic building. It's historically protected. So there are cases where like it's still legal. It's totally fine. It just doesn't quite match what we would expect today. Right. But there's also the case of like, yeah, if you turn a single family house into three units and you don't have a fire escape, you know, like that's quite risky and that's that happens a lot around universities it happens around UC I think you know there have been cases recently or not recently but years ago like you know kind of unpermitted unapproved attic unit that becomes super dangerous so yeah you want to be careful of that because okay maybe you can sneak by for a period of time but eventually like you know that's like pretty life-ruining right yeah you're caught doing illegal stuff So in short check make sure you're within those guidelines check professional resources and all that. Yeah Yeah, if you're doing construction, you know, if it's a small thing, you often don't need a permit. you know, if you're redoing the kitchen, certainly wiring and plumbing and, know, you permits for that kind of stuff. Yeah, but it seems like a lot of people that do end up going the house hacking route tend to look for places that are already pretty established as duplexes Yeah, and my it's gonna cost more to be able to do like to buy a place that's not suited for to be a duplex or a multifamily and then renovating it yourself that takes additional costs em So recurrent duplex and you know, and the, the, if it exists as a duplex, that's the best case. And if you can then invest a little bit of money, make the kitchen nicer, make the bathroom nicer, add another bathroom at a bedroom, you know, legally, um, you know, if you can add a little value that also like obviously creates, you know, makes a more valuable property. So we've talked a lot about the positives of this thing. It sounds good. It sounds too good to be true. It sounds like a cool tool to use for a lot of different people. What are the cons? Are there any big glaring, like, this might be something that you really need to really consider for your day-to-day life if you decide to go this route? Yeah, so it's a great question. think you now have a tenant, right? And in an apartment building or, you know, the unit you're renting, that's 24 seven. If their heat goes out at 3am, right, you have to fix the heat at 3am. And especially if you're going to try to manage it yourself, you know, that's the most cost effective way you just directly manage it. But that means you're the maintenance person, your support, your you know, you're the support line, they'll call you, they text you and you live next to them. And they're going to see you all the time, you know, like, hey, that leak is still going on, you know, in the roof, like, hey, you know, so it can be like quite a uncomfortable, it'd be quite annoying. And you know, yeah, you just now have to live next to or near, you know, effectively your customer. So I think that's probably the main thing. And you know, I think the other is like, you know, this by itself is probably not going to make you rich. You know, you have a big loan on the property. Sure. Sure. It's worth $300,000. But your loan is for, you know, 285 of that. So, you know, it's not it's not like you don't you're not all of sudden own the $300,000. Yeah, thing. So there's that. But yeah, I think the main thing is like you now have have a customer that lives right next to you, they're gonna have maintenance issues that could potentially be 24-7, people can trash places, you you guys know, you've talked a lot about the horror stories of managing property. um So if you have a bad tenant or a building that's falling apart, that can be painful. Would this be considered house hacking? Because I know it's like some people who Airbnb like a room out of their house, for example, like they've got like a basement room or something else. Is that kind of in the umbrella of house hacking? Yeah, I think Airbnb and the short-term rentals have opened up kind of a whole new world where if you're traveling or if you have a space or a room that you can rent out, again, legally check your regulations, blah, blah. But a place that you can rent out legally on an Airbnb or a short-term rental site, I think that's similar thing. And that's potentially opened it up to a lot more people where you just have a four-bedroom house and you can rent one room occasionally on Airbnb or something. Which I think is smart. Again, it's the same problems. You have to manage. You have check in. you know, the same potential issues, but if you can make 10 grand a year, five grand a year from rent, that's, you know, that's good. Yeah, imagine doing like the trifecta, right? You get it all you you do that you buy the duplex, right? You rent out one of the units to somebody that you know, you have roommates in your room that you can also have pay you rent and then you have a shed out back that you convert into like a luxury like weekend Airbnb, you just get that your your the whole do they call that in the industry the ultimate hack? Supreme hack. Exactly, numbers swirling around your head. You can see through time. It's perfect. I think another version of this too is there are lot more, there are more areas that are allowing ADUs, if heard that term, like an accessory dwelling unit. So for example, in California or Houston, Texas, you have single family areas, they're pretty low density, big lots of land, but now they're allowing you to build an accessory dwelling unit. So you have a big yard on the back of your yard, you can build like a one bedroom little tiny house and potentially rent a Barn Dominion, remember we talked about that? You can build a mini barn dominion house in the backyard. That's cool. that out and you you took what was your yard and now you have a rental unit there. Can you house hack in the big city? Like, I mean, we talked about like having like a Roy or a duplex or whatever like that, but like here in like a highly populated skyrise place like a Cincinnati or a New York or wherever it's like, certainly must be harder. you Yeah, I think, you know, I think there are versions of, you know, investing in a condo and fixing that up and renting it out. Um, you know, a friend of ours did that, basically had a condo and then, you know, lived there for a year and then rented it out. So I think you can do that in more of like a high rise condo setting, but I think the true hack of like you live in one and run out the other one, like it's pretty rare to be able to buy like two units as part of like a building condo. Okay. It applies a lot more to like a standalone building that has two units already in it. Okay. I guess my first landlord, I think that's pretty much what he had a property and then he made like the first level, like a separate unit, like through construction and stuff. So I guess that was technically house hacking. Yeah, probably. uh the biggest mistake you often see first time house hackers make? Is there like, you're like reaching through the, you're like, I wish I could have just told you this, don't do this one stupid thing. Is there anything that jumps out at you when you see people go into it for the first time? Yeah, I think the I think the idea that like this alone will make you rich. OK, I can think of a friend of ours who was doing this and renting out properties and, it was like, OK, now I can own this building forever. But, you know, at some point, you're just kind of managing tenants and you have this asset that if you sold it, you know, you could, you know, put whatever $50,000 or $100,000 of cash in your share in your account. think people are romantically attracted to like owning real and having that for a long term and like that by itself will lead to wealth and it's more like a good investment strategy rather than like a wealth builder I would say. And so like once you do the house hack I would say like you want to try to add some value redo a kitchen redo a bathroom, pay down the mortgage, maybe replace the roof like you know add some value to it and then for me like I don't think you then probably want to own that property forever assuming you want to like try to build some wealth if you're just trying to like save for retirement then sure just you know own it for 30 years but. Okay, Patrick, you got any any questions for our friend John here? oh No. You You took a while to think about that. Good. Yeah, I think you covered pretty much most of my questions. How do you think you would do Patrick as uh a house as a house hacker professional house hacker? I think I would do. I mean, like, was always kind of, it made sense to me to get a duplex, live in one unit, around the other. I didn't know that was called house hacking. I just thought that was called buying a duplex, renting the other. oh Yeah, again, like the special hack is like if you can do that with an FHA loan and you know, get like a foreign thousand dollar property, which that number sounds impossible to buy for most people. But if you only need $20,000, which is still a lot of money. Yeah. You you can you can imagine like saving your way to get there. And that's a hack to own. Oh, you're now you are now literally a multifamily real estate owner, you know, and it only took $20,000. So I think that's like the hack. And you might have clarified this with the FHA, but for everyone listening, you can really only utilize that once, right? Or is that something that you can do multiple times with the FHA loan? Like, could you theoretically get one as your first property and then like use another FHA uh loan for another property? believe you you then have to live there for a year. Okay, and then I believe if you sell the property There's some like lockout period where you know a period of time where you can't do it again because you know They're not trying to like build real estate Developers, they're trying to build like homeowners How does one get an FHA loan? it a pretty easy process or are there like a ton of hoops? It's not a ton of hoops. It's basically a government program administered by banks. Gotcha. So like there are, you know, have to be like an FAC registered bank and there's, you know, certain banks that will specialize in that. But yeah, basically a government program administered by like any or a lot of like local banks. would most like first time home owners be able to get approved for one pretty easily? m Yeah. Yeah, I think you know their intent is to encourage for people like me and Zach who've never owned property before but like want to in the next few years like an FHA loan is a very real thing that we can like realistically have. Yeah, okay. And again, you know, the main thing is you just need a lot less. Yeah, I mean it just sounds now are like the interest rates like a lot higher on FHLM No, I think they're competitive with like, you know, your normal mortgage rates. Okay. Yeah Sounds too good to be true. The government's like, come on, Zach, come on, Patrick. The government wants us to do well. First time home buyer, I think that's really the intent. But yeah, think the main thing look out for, which is true for any rental, is just having good tenants. A bad tenant can ruin your life, especially if they live right next to you or below you or whatever. How do you maintain a good tenant landlord relationship? I think even if it's uh someone who seems nice and whatever, like you put them through the normal screen, they apply, credit check, all that, you have a proper lease, you can evict them if things don't go well. I do think in my experience, you wanna be friendly and like, someone's a little late on rent and okay, they can pay it, you But the more you kind of let that stuff go, the worse it gets. uh in my experience. So for sure. You know, it's just an agreement and know, rent is due at the beginning of the month and there are acquired hours and you know, whatever you want to put in there. But yeah, I think your life is a lot better if you kind of enforce the lease, I guess. And screen up front, you know, because it's once you get someone down there, like that's the situation. Maybe one of these days we'll have to bring you back on the pod to talk about like an in depth on like doing applications and like getting like a tenant screen. I feel like that can be a good thorough discussion. Like the whole onboarding attendant process. Yeah, yeah, that would be good. Okay. Cool. Any other tidbits of wisdom that you feel like sharing before we wrap this bad boy up? No, I think that's it. I think if you're looking to buy your first property, you're looking to buy your first home, I think this house hack FHA is a good way to do it. And it really just comes down to what's the goal. Do you want to be a real estate developer? you want to build for retirement? And I think that really is going to impact how you view buying property. But yeah, if you're looking to be an investor, if you want to build some net worth, build some retirement, you know, think property where people pay you makes sense. sure. But owning a primary home is just a great way to be happy. those are two separate things. OK. Cool cool. that is a wrap on our deep dive into house hacking. uh Real estate strategy is part investment, part lifestyle shift. email questions at the renters pod if you've done the ultra hack. What did we call it? Mega hack? Ultra hack. Yeah the matrix hack. you've been able to accomplish the matrix hack, please email us. John, it's been a pleasure having you on the show. Do you want to tell the folks where they can find out more about you and about cohorts? Yeah, run a community basically of real estate operators and developers and investors. It's called Cohorts. So join Cohorts.com and then I'm on all socials, LinkedIn, Twitter at John J. Blatchford. Yeah, so it's join Cohorts.com. Join. Join. C-O-H-O-R-T-S.com. I thought you were telling people to join. Cohort started. The entire site, joincohorts.com. Join cohorts. Thank you. we're trying to inform the audience, not confuse them. I got it. All right, well, whether you're splitting a duplex, renting out your basement, just listing a room, house hacking can be a smart way to lower your cost of living and start building equity. We've learned that with John today. Thank you for listening to another episode of The Rentish Podcast. As a reminder, we can be found at The Rentish Pod on Instagram, email questions at therentishpod.com. And yeah, give us a rating, a review if you're on Spotify, five stars if you're on Apple Podcasts any other podcast. cast service, go ahead and slide that scale all the way up to 10 or however far it goes and drop us a comment, tell us how much you're enjoying the show. And I've been Zach, that's been Patrick, that's been John, and we'll see you guys next time. Thanks guys.