Ryan Chaw, 31, bought his first home in 2016 at the age of 23.
He kept living with his parents so he could rent the home and earn thousands of dollars per month.
Despite this success, he said he made one big homebuying mistake.
When Ryan Chaw was in his early 20s, he was eager to grow his wealth, and he saw real estate investing as one path to accomplishing this. But he knew he was going to need a lot of money.
The now 31-year-old told Insider that after graduating in 2015, he began working double shifts — up to 15 hours at a time — as a pharmacist at a California hospital. He also picked up extra work at another pharmacy most weekends, which meant he was working six to seven days per week. To save on housing costs, he lived at home with his parents.
After about a year, he’d saved up enough to make a down payment on a $262,000 home in Stockton, California. It was 91 years old and about 1,500 square feet.
“I grew up in a cultural background that emphasized hard work and strong discipline,” he said. “So I financed my first home entirely from my two jobs.”
But rather than moving into this new home, Chaw said he decided to keep living with his parents and rent it out. As of 2022, he was earning over $2,500 per month from four tenants, according to a document viewed by Insider. He paid off the home in 2021 and this past April, sold the property for about $437,000.
“I got all my money back and then much, much more,” he said.
In the US, high housing prices and more recently, high interest rates, have put buying a home out of reach for many young Americans. Last November, the typical first-time homebuyer was 36 years old, an all-time high, according to the National Association of Realtors.
But despite these challenges, many young people have found a way to attain homeownership before the age of 30. As of 2021, 29% of US 18-29-year-olds owned their homes, according to the Federal Reserve, compared to 61% of 30-44-year-olds. While some young Americans have relied on parental support to reach this milestone, others have saved money, boosted their credit scores, or used government programs to make this possible.
The rookie mistake that new homebuyers should avoid
While Chaw largely views his first homebuying experience as a success story, he said he made one costly mistake. After purchasing the Stockton home, which was built in 1925, he discovered there were roughly $30,000 in unexpected repairs. These included roughly $17,000 to replace the HVAC system, $4,700 for plumbing cleanup and the replacement of a sewage line, $1,700 to address a rat infestation problem, and $2,600 to install a new water heater.
“I didn’t do my due diligence to figure out if there were major issues with the property before buying it,” he said, adding, “Always get a house inspection done before making a purchasing decision; it can save you tens of thousands of dollars.”
Given he was in a bit of a bind, Chaw said his father agreed to cover roughly $23,000 of these repair expenses. In return, Chaw said he agreed to give his father $550 per month — the monthly rent of one of the tenants — for the rest of his life. He’s continued giving his father this money even though the property was sold in April.
Chaw said this experience helped him become a better real estate investor. In August, he quit his pharmacist job of over seven years to focus exclusively on managing his rental properties — he owns several across the country.
In 2021, Chaw decided to move out of his parent’s home to a house in Sacramento he purchased, but he didn’t stop having tenants. He’s currently using a strategy called house hacking, in which the homeowner lives in their house and rents out spare rooms to help pay down their mortgage. Chaw said he lives with four housemates.
“The way I see it, my $10,000 mistakes save me from making $100,000 future mistakes,” he said. “Real life education, aka ‘school of hard knocks,’ is priceless.”