It's taken over two years, but these days Jeremy Mateo is finally feeling at home. Mateo, 27, is a real estate broker in Honolulu, Hawaii, and bought his first condo on Oahu island right before the coronavirus pandemic in March 2020.
It all started in January 2019, when he was showing a unit in a building that overlooked Diamond Head and Waikiki. "Immediately I saw the view and thought to myself, 'Wow, I need to live here,'" Mateo tells CNBC Make It. "So I made it my absolute goal to earn the income in order to afford to buy a unit in this building."
Over the course of a year he saved $60,000 for a down payment and worked toward his goal of buying his "dream home."
Then he spent another year renovating and furnishing his place. The last of his furniture arrived in spring 2021, finally closing the chapter on his homebuying journey.
Here's how Mateo bought his one-bedroom condo for $560,000.
When Mateo set his homebuying goal, he was still learning the ropes of real estate and earning $20,000 a year. After researching one-bedroom prices in the area, he committed to selling 10 homes in 2019 in order to earn $100,000 in commissions, the bulk of which he'd put toward his down payment.
His determination paid off. After he set his goal, Mateo sold 17 homes that year, took home $120,000 and put everything into savings while giving himself $500 a month for food, gas and daily expenses. Mateo is grateful his mom let him continue to live at home rent-free during that time.
"She just wanted me to sell a bunch of homes and save for my down payment so I could buy my home. And as soon as I moved out, she was extremely happy," Mateo says, laughing.
Mateo supplemented his income working as a nightclub deejay and even saved money on his social life by getting free admission and drinks to join his friends while working: "Being a deejay will help you save on cocktails," he adds.
Though Mateo was hitting his savings goals, he recognized that one-bedroom units in his price range were scarce.
He went back to his dream building and looked up the names and addresses of residents on the 25th floor and above, then sent out three rounds of handwritten letters to see if anyone was interested in selling their unit to him.
When that didn't work, he used his insider access to check the MLS, or multiple listing service database, for expired listings to see if he could reopen any offers. He found an expired listing from 2012 for a unit on the 37th floor going for $560,000. Mateo then called the real estate agent behind the listing to see if the residents were still interested in selling.
As Mateo remembers it, "the next day he calls me back and he says, 'Hey, Jeremy. Yes, my clients, they actually want to sell now.' And right there I hung up the phone and I got up and I yelled. I was cheering. I was super excited."
Mateo used the original $560,000 listing price as a jumping off point, which the sellers accepted. Mateo considers it "a really great deal."
He was surprised by the stress he felt throughout the process: "As a real estate agent, I thought I was prepared for everything. But when it came to the emotional side, I was still stressing."
Mateo put 10% down on his home, or $56,000. He originally hoped to secure a loan with 5% down but, because his earnings fluctuate as a real estate agent, he had to put more down.
His closing costs were $7,800, but he also earned a 1.5% commission for buying his own home as an agent, which wiped out this upfront expense.
To pad his bank account and appear less risky to his lender, his mom and grandmother deposited about $37,000 into his account "to show [the lender] that I'm able to buy this home and I'm not going to be broke," Mateo explains. "I was kind of apprehensive of them doing that, but it was the only way for me to close on the loan." He says he's since returned the gifted funds.
Mateo used a 30-year fixed-rate mortgage with a 4.25% interest rate. Because the down payment was less than 20%, he pays $185 per month for private mortgage insurance, bringing his total monthly mortgage payment to about $2,833. He pays an additional $1,010 per month in homeowners association fees, maintenance fees, taxes and insurance.
In total, his monthly housing costs are around $3,843.
After he closed on his home, Mateo planned to do a complete renovation to create his "modern millennial bachelor pad" and budgeted $50,000 to the project. He ended up going over budget and, with furnishings, spent $100,000 to fully outfit his space. He says part of the overspending came from working with a contractor who wasn't transparent about pricing upfront, and Mateo estimates he could have saved $30,000 by going with someone else.
Right inside Mateo's front door is a full-length mirror with a Forbes decal: "So whenever I leave my home, I can look at myself and say, 'Hey, Jeremy, you're going to be on the cover of Forbes magazine one day.' I know it's kind of lame, but, you know, I call it manifestation."
Off the entryway is the renovated kitchen, where Mateo removed a wall of cabinets to open up the view into the living room and balcony. He swapped out the woodwork of the remaining cabinets and upgraded the appliances to a Samsung fridge, wall-mounted oven and microwave, and installed a glass rinser next to the sink, which comes in handy when he's serving drinks to his friends.
Mateo outfitted his living room with hosting and entertaining in mind. He had a custom entertainment center made, complete with a 60" electronic fireplace and a panel for Alexa-operated electronic lights. One of his splurges includes his 82" TV, where he enjoys watching football and basketball games.
The bedroom fits a king-sized bed, two nightstands, a dresser and another 55" flatscreen TV. Though it's ample space for living, Mateo says the biggest downside to his condo its lack of storage, other than a "tiny closet."
Another major renovation project was modernizing the bathroom with a new standing shower, toilet, mirror with LED lights, cabinetry and counterspace.
Though Mateo's condo is 800 square feet inside, the crown jewel of the space — the balcony and its view — adds another 300 square feet of room outside.
"This is the reason why I wanted to live in this building," Mateo says of his balcony access and the view he gets from the 37th floor. He often works and eats outside, and he especially loves the space for having friends over. "This is everything I've ever wanted in my life so far."
After Mateo finally closed on his home in March 2020, his first few months of homeownership were stressful. Covid struck right after he closed on his home, and he was suddenly without income as the pandemic shut down the real estate market
Mateo panicked: "I have a mortgage now," but "I didn't sell a home for two months, and I honestly was starting to worry a lot."
By summer, however, the Federal Reserve announced it would hold benchmark interest rates near zero through 2022, "and that's when all of real estate just started going crazy here in Hawaii."
As a result of the wild real estate market that played out for the remainder of the year, Mateo sold 24 homes in 2020 and earned around $250,000 in income, which helped him cover his new housing costs and renovation overspending. Still, going from living on $500 to having nearly $4,000 in housing costs per month has been an adjustment, and Mateo says he's living frugally now to rebuild his savings cushion.
He plans to live in the condo for four to five years, then buy a single family home and rent out the unit for passive income.
"For me to be a homeowner at 27 in Hawaii, of all places, I think it's such a great accomplishment," Mateo says. "Hawaii is one of the most expensive places in the country. And for me to buy a very nice home at this young age, it feels so good."
Mateo hopes sharing his own buying experience will help other millennials understand the ups and downs of the process. While he previously thought about leaving for the mainland, he's come to understand the privilege of being able to afford life in Hawaii: "When it comes to the people here, the food here, the culture here, that is what makes me love Hawaii so much."