Bank on Your Neighbor: The Audiobook Podcast
Building wealth doesn’t have to mean Wall Street. In this exclusive audio series, Mel Dorman brings you Bank on Your Neighbor — a practical, people-first guide to seller financing. Learn how to create ethical, win-win deals rooted in relationships and strategy, and start building financial freedom right in your own community.
https://meldorman.com
Bank on Your Neighbor: The Audiobook Podcast
Bank on Your Neighbor: The Audiobook - Chapter 5
Buying a single-family home is supposed to be the cornerstone of the American Dream—but what if it’s actually holding you back? In this chapter of Bank on Your Neighbor, Mel Dorman pulls back the curtain on one of the biggest money myths: that your first investment should be a single-family house.
Drawing from her own journey—from long nights in the LA County Jail intake office to landing her first multifamily property—Mel shows why buying a house often leads to financial slowdown, not freedom. Instead, she reveals why multifamily properties offer stability, scalability, and a faster path to wealth, even for everyday people without big bank backing.
If you’ve ever wondered whether your “starter home” is really helping you get ahead, this episode will give you a new lens—and a roadmap for building freedom faster.
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Hi, friend. I'm Mel Doman, real estate investor, former social worker, TEDx speaker and financial activist. And this, this is Bank On Your Neighbor, the podcast. You're probably here because you felt it too, that the system wasn't built for us. That building wealth shouldn't mean selling your soul to Wall Street or crossing your fingers every time a bank says no. That there has to be another way. Well, there is, and this podcast is my free gift to you. That's right. Free, no paywall, no audible subscription, no gatekeepers standing between you and the knowledge that can change your life. Because here's the truth, just because something's free doesn't mean it isn't valuable. Sometimes the most valuable things, clarity, empowerment, freedom, don't come with a price tag. They come with purpose. I created this podcast because I'm on a mission to decentralize wealth, to take power out of the hands of billionaires and put it back into our communities. Each episode is a chapter from my book Bank on Your Neighbor. Read by me. It's my way of making sure this knowledge reaches the people who need it most without a single algorithm getting in the way. We'll walk through the real strategies I use to go from dumpster diving in my twenties to building a multimillion dollar portfolio in my thirties without banks, without credit, and without compromising my values. We'll talk seller financing, community centered investing. And creative ways to build wealth that actually serve people, not exploit them. But this isn't just a podcast, it's a movement, a radical reclaiming of power, a blueprint for creating more community-minded millionaires and fewer billionaires extracting from our neighborhoods. Every chapter builds on the last, so I recommend listening in order. I'll drop links, visuals, and extra resources in the show notes to help you take action. Not just absorb information and if something in an episode strikes a chord, send it to someone you care about. That's how we spread financial literacy. That's how we grow a movement. That's how we rise together. Welcome to Bank on Your Neighbor. Welcome to the movement. Let's build something together. Chapter five, money. Myth number four, buy a single family home. If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. Edmund Burke. The smell of jail is something the nose never forgets. A mix of chemical disinfectant, body odor, and peanut butter and jelly sandwiches. Each day I sat at my intake desk, awaiting my next client. Sometimes minutes, sometimes hours. Turns out whether you're an inmate or a social worker, there's a lot of downtime in jail to ponder. As my father grew more ill with Alzheimer's, so did my sense of helplessness. If dad needed a couple million dollars to retire, then I'd better figure out how to build wealth or risk following in his footsteps. I didn't have a roadmap, but I had a question burning in my chest. How do people actually get ahead determined to change the trajectory of my family's situation and my own? I set out to learn about money and like any good millennial facing a life crisis. I Googled it. My research led me to real estate, the get rich slow method for people like me who could barely do arithmetic, scouring the mountains of information on wealth building. This one felt within reach. I didn't need to invent an app, pitch a startup, or have an MBA. Everyone needs a place to live. Providing housing is a business model as old as commerce itself. Between processing inmates at LA County Jail, I devoured the top real estate books and podcasts self assigning a postgraduate curriculum that filled 20 hours a week on the side and buried in all that learning, I discovered a truth that shook me. Buying a single family home isn't the American dream, it's the American delay. In this chapter, we'll debunk the myth that your first investment should be a single family home. It's a belief that has trapped generations in a slower, riskier, and less liberating financial path. I'll show you what I learned and how I escaped that trap and how you can too. The single Family Home trap. Despite being a top realtor for many years, I'll say it plainly. Buying a single family home is one of the most overrated financial moves you can make. Here's why. As a young adult, you diligently save a bit of cash and what's the advice? Invest in a single family home. But behind that shiny milestone, most people are walking into a financial slowdown they can't see coming. The very home, we're told to buy first. Our starter investment isn't actually an asset, it's a liability, and yet it's hailed as the cornerstone of the American dream. You buy the house, you fill it with new furnishings. You finance a car to match. You keep up with the neighbors, and soon enough, your expenses quietly rise to meet your income. There's nothing left to invest. No financial buffer. Just a white picket hamster wheel with granite countertops. We're told we've made it, but in truth, many of us have only made ourselves more dependent on our paychecks. Meanwhile, take a look at the corporations and financial institutions that have made an ass or asset out of us. All along the way, remember who lent us the money for our cars, our education, and our homes every month. They enjoy a steady stream of passive income as we pay them off with interest. Let's simplify it. Assets. Put money in your pocket. Liabilities. Take money out by that math. Your home isn't building wealth, it's training it. If it doesn't produce monthly income, it fails the asset test. But what about appreciation? The homeowner cries. It's true your home might appreciate faster than the interest you're paying, and over time, you'll likely build some equity that's better than renting. No question. In fact, do you know homeowners have on average 40 times more wealth than renters? That's largely because mortgages act like a forced savings account. You can't spend what's tied up in your walls and over time, you benefit from rising property values. So let me be clear. I'm not saying never buy a home, and I'm not here to shame home ownership. I'm saying don't confuse it with a wealth building strategy. Buying a single family home might be a step towards stability, but it's not a step towards financial freedom. It's a slower, riskier, and far more isolating path, especially when there's a better option. Most people never get taught. Buy multi-family instead. And in the next section, I'll show you why. What I discovered during all those hours studying real estate in my downtime was this. Buying the right multifamily property can accelerate your paths to financial freedom in a way that single family homes rarely do. Here's how it works. One less risk, more stability. When you own a single family home and the tenant moves out, that's a hundred percent vacancy, zero income, full mortgage on you. But with a duplex, triplex, or fourplex, one vacancy doesn't tank your entire income stream. Multiple tenants means the risk is spread out. Financial security is built right into the structure. Two, efficiency of scale. Multifamily properties come with what's called an economy of scale. It's just a fancy way of saying managing more units under one roof is easier and often cheaper than managing multiple individual properties. Think about it. One roof to maintain, one yard to mow, one trip for repairs. More units, less overhead per door. That efficiency adds up three better numbers. The math simply works better when you compare rent collected versus price paid. Multi-family often outperforms in my market, a $500,000 single family home might rent for $2,800 a month, but a $500,000 duplex could bring in $3,600 a month in rent or more. That's a 28% income increase for the same purchase price. As a broke social worker with big dreams and a tight budget, I needed every advantage I could find. Multifamily offered a faster route to freedom without needing to gamble on the stock market or scale a high growth business. It was real, tangible and historically proven. After a year of self-education, four times faster than college, it was time to put my knowledge to the test. I moved to Portland and began putting my plan into action. I started sending letters to duplex owners offering to buy directly without the competition or chaos of the open market. I hand addressed 300 envelopes in the backseat of my social work carpool, signing each one by hand, sealing them with a prayer and a postage stamp. That's how I earned the nickname Zillow because while others were swiping through dating apps, I was falling in love with off market real estate, and it worked. One of those letters landed in the hands of an out-of-state realtor looking to sell her parents' duplex. She called me directly, no bidding war, no open house, just one-on-one attention from the seller, exactly what I needed. Since I couldn't afford to compete, even with all my studying, I was still a novice. I didn't have a realtor holding my hand through the process, but there was one on the other side negotiating against me. When we finally put the deal together over the phone, she said, we have an agreement. Now let's open escrow. For those unfamiliar escrow is the neutral third party that handles the funds and paperwork to ensure everyone is treated fairly and despite my lack of experience, luck, or maybe preparation was on my side, the appraisal came back$50,000 higher than the purchase price. Let's do the math.$300 in stamps, 30 hours of envelope licking $50,000 in equity earned on day one. That's more than most social workers make in a year. Now who's laughing? Said Zillow from the backseat of my carpool and the sellers, they made over a hundred thousand dollars on a property they'd bought just three years earlier. Their realtor dollar got the listing sold quickly. Without hassle, everybody won. But for me, it wasn't just about the money. This was the moment I realized you don't have to be the highest bidder. You just have to be the most prepared and with the right strategy, you can win even when the odds say you shouldn't. With enough grit, the odds don't matter. Forget working from home. Put your home to work. If you already own a single family home, don't panic. The good news is there are ways to turn your home from a liability into an asset to send it to work for you instead of the other way around. Option one, move out and rent it. One of the simplest ways to convert your home into an income producing asset is to move out and rent it as long as it cash flows. That means your monthly rent exceeds your monthly expenses, leaving you with positive income. Instead of selling every few years and trading up to a bigger shinier liability, imagine keeping that home and letting a tenant pay the mortgage for you while others are climbing the ladder sideways. You are stacking bricks towards financial freedom. This is advice I give many of my real estate clients, even when it costs me a fat commission check, but I do it anyways because it's the right move and I want people to win This strategy. Has a name, buy, occupy rent, repeat. It's the get rich slow method. Of the small landlord and it works. Option two, add roommates. Another way to turn your home into an asset is to share it renting out extra rooms. Also known as house hacking, can drastically reduce your monthly expenses and build your savings faster. I've lived with roommates much of my adult life and loved it, but I know it's not for everyone. Maybe you've got kids, maybe you're craving privacy. If that's the case, skip to option three. Option three, go Multifamily. This was my path. I bought multifamily homes, mostly two to four units. I lived in one and rented out the others with walls. Between us, I got both privacy and income. Let me say that again. I lived in apartments in my twenties. Why not get paid to do it in my thirties? Even though a multi-family property usually costs more than a single family home, it often costs less to live in. Why? The rental income from the other units offsets your mortgage. That means I could live cheaper than I would renting while building wealth every single month. That financial breathing room became my snowball. I used those savings to buy the next property than the next, and with each one, the momentum picked up speed. It wasn't just safer, it was scalable. If I lost my job, I still had income from other tenants. If a tenant left, others were still paying the rent. Multifamily made my freedom possible. Here's a little known fact that surprises nearly every first time investor I meet. It's actually easier to qualify for a mortgage on a two to four unit property than on a single family home. Seriously. That's because when lenders evaluate your loan application, they look at your debt to income ratio, DTI, how much debt you carry compared to how much income you make. Normally, your income is limited to your paycheck. When you buy a small, multi-family building, lenders also count the future rental income from those units you won't live in. That extra income boosts your borrowing power. Think of it like getting a raise without asking your boss. Let's say you wanna buy a triplex. You plan to live in one unit and rent out the other two. The projected rents from the two units get added to your income in the lender's formula. That means you might qualify for a larger loan than you would if you were buying a single family home. Even though the property costs more, it seems counterintuitive, but that's the upside down logic of money. The more income producing your purchase is the less risky the bank sees it. So while your friends are stressing about affording their single family homes, you might be quietly closing on a triplex with help from your tenants and your lender. It pays to be different. Let's be honest. Stepping away from the crowd isn't easy. While your friends are settling into their single family homes and inviting you over for dinner parties, it can be hard to stay the course. Their kitchens are renovated, their lawns are landscaped, and you, you're living in a one unit and a fourplex with tenants across the hall. It might not feel like you're winning yet. Changing your financial future often requires making choices that look backwards before they move you forward. That's the uncomfortable part, but here's what I've learned. A few years of intentional sacrifice can build a lifetime of freedom. As the saying goes, entrepreneurship is living a few years of life, like most people won't, so that you can spend the rest of your life, like most people can't. That's exactly what happened for me. I chose a different path. I lived like no one else around me, and within a few short years, the snowball had started to roll. I wasn't just paying my bills, I was building a portfolio. I wasn't just surviving. I was designing a life that made me feel free. And hey, not to brag, but the ladies don't call me a freak in the sheets for nothing. I like to light a candle, turn on some soft music, and slide into my favorite kind of sheets, Excel spreadsheets, and run the numbers. Imagine a chart that shows you what I mean, the snowball effect of appreciation. It illustrates how with just $25,000 per property, you could buy one $500,000 cash flowing property each year for five years. Assuming 5% appreciation, that initial 125,000 investment could grow into a $572,984 in equity, a 360% return over five years. Try getting that in the stock market. In the next chapter, we'll take a deeper look at the money myth that's even more widely accepted. One that feels so safe. It's practically gospel, the idea that your money is secure in the bank. Spoiler, it's not, and I'll show you why.