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The Real Estate UNLOCKED Podcast
How House Hacking Can Change Your Financial Future | Episode 08
Ever wondered how you can turn your home into a money-making machine? Discover the secrets of house hacking with seasoned real estate investor Lisa Field Moore. Lisa started her journey in 2017, moving from Massachusetts to Salt Lake City, and shares how she subsidized her mortgage by renting out parts of her first property. You’ll learn the essentials of house hacking, from creative income ideas like renting basements and leveraging platforms like Peerspace, to building equity and capital for future investments.
Explore various house hacking strategies that even beginners can implement. From obtaining mortgage approval to leveraging new laws for purchasing multi-unit properties with minimal down payments, we break down the initial steps. Joseph also shares his personal experience from 2017, demonstrating that anyone can start with modest beginnings. You'll find out how renting out garage spaces, offering swimming lessons, and using Airbnb can significantly boost your passive income, even while accommodating family visits.
Unlock the fundamentals of house hacking and learn how to maximize wealth through this innovative strategy. We delve into the nitty-gritty of advertising rental spaces and managing tenants effectively, emphasizing the importance of tenant screening and choosing between long-term and short-term rentals. Lisa shares her ambitious real estate goals for 2024, along with creative financing tips and house hacking strategies to help you get started. Whether you’re just beginning your real estate journey or looking to expand your portfolio, this episode is packed with actionable insights to help you succeed.
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What up everyone and welcome back to the Real Estate Unlocked podcast. I'm your host, joseph Marro, and today we're going to be covering a super exciting topic in real estate a must-have tool in your property investment arsenal, a creative way to subsidize your existing mortgage. Today's topic is all about house hacking. House hacking is a real estate strategy that involves purchasing a property, then renting part of that property out to help subsidize your existing mortgage. House hacking can only make it easier for you to own your own home, but it can also help you to build more capital to invest in more real estate or other businesses. Now, if you're intrigued by the idea of making your home work for you, this episode is going to cover all the groundwork of house hacking benefits, how to get started and the various ways you can implement it today. Now you know how we do it on the Real Estate Unlocked podcast. If we're going to do it, we got to do it right. We can't just bring on anyone to speak about house hacking. We got to bring on the queen of house hacking. Today, our special guest on the podcast is Miss Lisa Field Moore.
Joseph Marohn:In 2017, lisa's multifamily investment journey began by house hacking her first home Together with her husband. She now owns 19 doors across eight different properties. She is also a limited partner on 192 unit syndication in North Carolina, with notable figures like Veena Jetty and Pace Morby, with the power of real estate. Lisa was able to quit her corporate job in 2021 and has since then invested heavily in networking and education to pursue her goals in acquiring larger multifamily assets. Becoming a VP at her local Real Estate Investors Association, she has now been given the opportunity to share her passion with others. So, without further ado I've been talking long enough Everyone if you will, please allow me to formally introduce to you Lisa Moore. Lisa, talk to us. How are you doing today?
Lisa Moore:I am doing excellent. Thank you for having me, Joseph. I'm excited to be here.
Joseph Marohn:Yeah, no problem. Thank you for joining us and to talk about this excellent topic. Yeah, lisa, I know you have a very tight schedule, so thank you for joining us today to talk about, in my opinion, one of the greatest ways to get started and familiarize yourself with real estate investing, but, even further than that, finding a way to get creative in a time where we're dealing with not only high interest rates but also high mortgage payments that most people just can't afford right now. So, thank you.
Lisa Moore:You're welcome.
Joseph Marohn:You ready to drop some gems?
Lisa Moore:Let's do it.
Joseph Marohn:Let's go. So what's your story, lisa? You've been doing real estate your whole life, or what?
Lisa Moore:No, I started in 2017. I'd always been interested in real estate, but I wish I had started when I was younger. But I got started in 2017. I was early 30s about 33 when I bought my first house and house hacked it. I grew up in Massachusetts. I moved to Salt Lake City in 2016. I knew that I wanted to buy a property, so I spent the first year just figuring out where I wanted to buy it, and I also knew that I didn't want to have to pay for all of it myself. I wanted to subsidize my mortgage. So it was a great option. House hacking I don't think the term even existed back then, but it was a great way to be able to buy my first property, start building that equity and building that asset and having others pay a good portion of my mortgage.
Joseph Marohn:So that's awesome. I really love this term, you know. It's a great way for, like new people to really just get into real estate, you know, and kind of learn the ins and outs of you know, getting familiar with you know, with tenants and property managing, if you will. I think it's just a great way for people to get started. People always ask all the time like how do I get started in real estate? And I always say house hacking is a great way to get started.
Lisa Moore:Yes, I know so many people in there and there's no wrong way to get started. But it always amazes me when people they want to get started and they always go like to wholesaling and flipping and I'm like man, like those are not like to me how it's like you need a place to live right you know everyone needs a roof over their head and if you're going to be paying money towards your living expenses, why not pay it towards something that you own and if you can rent out a portion of it and get that subsidized?
Lisa Moore:you know the house we live in now is we still house hack? We rent our basement and they pay like 93, 94% of all of our living expenses. So we're living in a house that has appreciated greatly since we bought it and it costs us a few hundred bucks a month, so it's an awesome way to get started.
Joseph Marohn:Absolutely. I couldn't agree with you more there. So let's let's put ourselves in the same shoes. As someone that is completely new to real estate. Maybe they heard of this term before, but not quite sure exactly what it is. How would you define house hacking in the simplest terms?
Lisa Moore:To me, it's just a way to generate income from the place you live.
Joseph Marohn:Awesome. You couldn't have simplified it any more than that.
Lisa Moore:And it isn't just renting a bedroom, like a lot of people they may not want to rent a bedroom or something like that it's just generating income from your property, so it doesn't necessarily mean renting to other people. There's a website called Peerspace, so if you have a house with a cool backyard or inside or something like that like or a podcast studio in your house, you can put it on Peerspace and people will rent that. You have an extra shed or an extra garage? That's a storage unit. You could rent that. So it's not necessarily always having somebody living in your house. It's just any way to generate money from your residence.
Joseph Marohn:I've heard some crazy stories. People really get creative with this stuff. I've heard people renting out their garage space that's pretty smart to contractors and whatnot. And then I've even heard people renting out their pool and having people pay for lessons to take their children to go swimming and stuff. It's like crazy what you could do with this stuff.
Lisa Moore:Yeah yeah. You have a pool for lessons like that or photo shoots. You put it out there. You never know who's going to be looking for what to do some photo shoots or swim lessons or whatever. So you have a cool space or something like that. Put it out there. You never know what you might be able to get as far as income in some of these websites.
Joseph Marohn:Right. So what are the first steps a beginner should take if they're interested in house hacking and want to start today?
Lisa Moore:Well, to house hack, you do have to buy your own property. So the first step is going and figuring out what you can get approved for with a mortgage. So find a local lender, or any lender, and talk to them. Find out what you can get approved on. And now they're. I think it was this past fall. They passed a law where for multi-units so for two, three or four unit properties you can buy them with as little as 5% down. So that is a drop from 15, 20, 25%, depending on the property, from what it was. So to be able to house hack with a 5% down payment right into a two, three or four unit is huge. So you can go to a lender, find out what you're approved for and talk to them about the fact that you're going to house hack.
Lisa Moore:I have my license here in Utah and I'm actually working with a buyer right now who's looking to buy a condo and she's going to house hack. You know, I have my license here in Utah and I'm actually working with a buyer right now who's looking to buy a condo and she's going to be house hacking that. So the lender is actually letting her use. She's got a signed lease from somebody and they're actually letting her use that income to help qualify. So will every lender do that? No, but if you're willing to put the time in to go around and find a lender like, hey, I'm going to house hack, this is my plan you will be able to find a lender that will more than likely let you use that potential income for your house hack, so that will help you get approved for even more of a house. So getting approved is definitely the first step. Know how much house you can afford and then you can start looking.
Joseph Marohn:That's great advice. I know you talked a little bit about your background, but I'm interested to hear more about your first house hacking experience. You mind sharing your story?
Lisa Moore:Yeah. So when I was looking for my first house, it was in 2017. And I knew, like I said, I knew I was going to house hack it, but I also couldn't afford, you know, a five, six bed, four bath house or anything like that. So for me I was like looked at, I knew what I could afford, I knew what I was comfortable with, payment wise and financially, and so I went out and found a house that fit. That Was it. You know, it was a small house. It was a two bed, one bath, 777 square foot house. So I was sharing a bathroom with the people that were there for Airbnb. So was it ideal? No, was it something that I'd want to go back to? No, but I'm glad that I did it because it got me started and you start to get a taste of that, like I'm not really paying that much for my housing expenses anymore and to me it's worth the sacrifice.
Lisa Moore:So I knew that I was going to rent a bedroom and I wanted to do it part time. I didn't want to do a full time roommate because I only had the one extra bedroom and I knew my family was going to be coming out when my mom came out my brother, my friends. I wanted to be able to block off that bedroom so then they would be able to stay there, or if I just didn't want guests, then I'd be able to block it off. So doing the Airbnb was perfect for me. My goal was to generate at least $300 a month bare minimum and I far exceeded that every month.
Lisa Moore:Most of the time I was having to block off dates because I, just, like, was having people there too often or I couldn't switch it, get it ready for the next guest. But I was just really looking for a property really where I wanted to live and that had the aspects that I was looking for in a house and knowing that if it's a place that I want to live, granted short of you being out in the complete sticks and not near anything but within Salt Lake City, I knew that wherever I found a place, I was going to be able to house hack and that people were going to be willing to rent the bedroom. So, yeah, just looking for a house that fit my budget and was something that I wanted in an area that I wanted to be, and knowing that I'd be renting out one of those bedrooms.
Joseph Marohn:So it's a short term discomfort for a long term gain right.
Lisa Moore:Yep, yeah, I mean, we did that for a few. We lived in that house for a few years three years and it generated us a lot of you know. You know not hundreds of thousands of dollars, but it allowed me to be able to live for very close to free. So I could spend that money investing in other properties. And we, you know, we saved up. We actually added a apartment in the basement and were able to fix that house up. It was a more just cosmetic fixes, but we were able to fix that house up. It was more just cosmetic fixes, but we were able to. You know, I could put money into that property and increase its value and get it ready. So when I moved out and rented it, that money that I generated from house hacking upgraded that house and made it even more appealing. So when it did come time for us to move out and rent it, I was renting it for way more than I would have if I didn't do those upgrades.
Joseph Marohn:That's awesome. You know, one of the biggest objections I hear all the time is well, I don't want to live next to someone or possibly share a wall with a stranger Right. Lisa, what would you say to that person to maybe help them see it from a different perspective?
Lisa Moore:So short of you owning your own single family home? You know and I do get this a lot and I've had people that say to me well, I wouldn't want to rent my basement or I wouldn't want to share space in my house or share a wall with anyone, but they're living in apartment complexes. You have people above you, below you and on both sides of you. You don't get to choose who those people are, so short of you being someone that's living in your own single family house. If you're renting an apartment and you're like, well, I don't want to share a wall with somebody, you already are. So if you're going to, or if you're already sharing a wall with somebody, if you're already having a deal with that, why not do it in a place that you own and you get to choose who that is?
Lisa Moore:You know our basement tenants. We get to choose who lives down there. So if we meet somebody and have a place and we don't feel comfortable with them or you know they love to party on Friday nights or they're big, you know they say they played the drums or something no, we can choose who's in there to make sure it matches with us and our lifestyle. So it's if you're willing to make some sacrifices for a short period of time, then to me that's well worth the benefits that you get out of house hacking and starting to build that wealth. My first house I bought for $200,000 in 2017, sold it in 2021 for $440,000.
Joseph Marohn:Wow.
Lisa Moore:So that's a huge and granted, this was in Utah and we had just sheer luck of the market going crazy. But we also improved it. So we put a new kitchen and I did new flooring, I painted it, we did the entire yard. You know, I landscaped the entire yard, added a shed, so I did add value to it. But just owning a property and having that equity, it may not go up quite that fast but majority of places you are going to appreciate and you're going to build that wealth and you're going to have that equity that you can use down the road.
Joseph Marohn:That's awesome. A little bit of discomfort to earn 240K of equity. I mean, who's going to complain about that, right, yeah, I mean, somebody might, but I mean I'm sure as heck not going to be doing that. But on top of that, it doesn't necessarily have to be a single family home. Right, it could be a quadplex, be a duplex, triplex, whatever you want to rent out, or whatever you can afford at that time you can make it work. So do you think this can work if you have a family, or would you say this strategy is more suited for someone that's single?
Lisa Moore:It 100% can work for anyone. If you have a family, are you going to want to be renting a bedroom to a stranger with little kids? Probably not. But you buy a place like our current home. We have a basement apartment. If we had kids, I would have no issue renting out our basement because it's a completely separate unit so there is no interior shared space. They have their own entrance from the outside. Yes, we see each other like any normal neighbor when you're. You know parking and stuff like that, but we're not sharing any space.
Lisa Moore:So even if you have a family or you have kids, you can find places that have in-law apartments or they have an apartment over the garage or something like that. Or you buy a duplex or a triplex or a fourplex. We've house hacked a triplex and we lived in one of the units and rented out the other two. So that's another avenue where you can easily buy a multifamily and have that space. Again, it's sort of just like having an apartment.
Lisa Moore:If you're living in an apartment building with kids, then you can house hack your own property if you have a separate unit. I definitely understand people not wanting a bedroom rented to a stranger if they have kids, but I have friends that they do the same. Their basement is a separate apartment and they've got two kids upstairs and they rent that out short-term rental and it generates them a lot of income and allows them to just have that money to either reinvest into their property or into something else. So I don't think it matters if you have a family or not. There's always a solution if you're willing to live in a duplex or a triplex or a fourplex or have a mother-in-law apartment.
Joseph Marohn:Right, and you did mention income, so let's talk a little bit about the financing for a house hacking property. Are there any specific loan products that may be best suited for this strategy?
Lisa Moore:House hacking is becoming more popular and I've definitely noticed as I talk to lenders and talking to other investors. Or, like the buyer I mentioned earlier, she was able to find a lender that's letting her use that potential income for qualifying. So I do think more lenders are starting to allow that and they're also looking at is things are getting more expensive. It is harder to to afford a home, um. So I think a lot of lenders are starting to loosen up on some of the things. Some of them they want to see that you've been doing it for a year or two.
Lisa Moore:Others you can your first property. They may start letting you use that income. They may not use a hundred percent of it. They may say, okay, your potential is a thousand dollars, but we're going to use 700 or 600. That's still additional money to help you qualify. So if you are looking to house hack and you go to a lender and they say you can't do that, try another lender. There are so many lenders out there and there's a lot of investor-friendly lenders that are out there. Now that Can I guarantee you would find one? No, but I would be. I would, with quite a bit of confidence, say if you contact enough lenders, especially investor friendly lenders, you'd be able to find someone that will allow you to use at least a portion of that potential income that you'd get from house hacking.
Joseph Marohn:Right. And then would you say it's kind of frowned upon with lenders or like are you even mentioning it when you're getting a loan upon?
Lisa Moore:with lenders or like are you even mentioning it when you're getting a loan? We absolutely do the ones that we have house hacked and the ones that we've done. We absolutely mention it and tell them, like this is our plan, this is the potential income and, like I said, my buyer she's not a real estate investor, she's buying a condo and they're letting her use that income to help qualify because she knows. Telling them like this is what I plan to do, so yes, absolutely they, they will. Again, if you find the right lender, let you use that and definitely tell your lender and be upfront right away at the lender, like I'm looking for a lender that's going to allow me to use the income from house hacking. Will you do that? And that'll be your first question with your lender.
Lisa Moore:If they say no, then thank you, move on to the next one, but make that your first question. If that is your plan, then make that your first question with the lender and find out if they'd allow it and if they do, awesome, move forward. If not, then you know you can go on to another lender. We buying one of our properties. We went through over a dozen lenders before we would find the one that worked for that property in that house hack situation. So it can take a while to find a lender, but it's well worth the time spent for what it can save you and what it can get you.
Joseph Marohn:Great advice. What's the minimum amount of money someone might need to start house hacking?
Lisa Moore:So that would depend on if you're buying a two, three or four unit property, there is the 5% down. But if you're buying a single family home, there are loan programs out there that are 1% down, 3% down. So if you're buying a $300,000 house and you can get into something that's a 1% down program, you'll be paying that 1% to 3,000 plus your closing costs and you can also find a lender that will give closing credits. So when I bought my first house it was a couple thousand bucks out of pocket because at the time there was a loan program first time home buyers it was. I think it was a 1%, it might've been 3% down, but then they had lender credits that went towards my closing costs. So for me out of pocket it was very little and there are still programs out there that do that. I know my buyer right now has a program similar and when you're negotiating, when you're making offers on a house, put that into your offer.
Lisa Moore:In the last few years during COVID, putting concessions into your offer was not going to happen. It was kind of crazy. But right now in Salt Lake at least you can negotiate. That you know you can put into your offer. I want, if you're asking 300,000 for property like I'll, I'll pay you your asking, but I want 10,000 or 5,000 or 15, whatever it is towards closing costs. So that's another way to supplement your out of pocket is by asking for concessions and asking for money towards closing costs in your offer. So make sure you get a good realtor that knows how to negotiate those things too.
Joseph Marohn:Excellent advice. Excellent advice. What kind of financial benefits can one expect from house hacking?
Lisa Moore:I mean one, just the saving money on your living expenses. Your living expenses are typically going to be your most expensive thing, most people. You're spending a third to a half of your income on where you live.
Lisa Moore:Absolutely so you can cut back on that. Even if it's just half, that's a huge, huge benefit. So I mean, right off the bat, just being able to reduce your living expenses is the number one thing. But then you're also building equity. We have built equity in all of our properties and our house tax the current house that we live in. Again, it was a complete remodel. My husband's a GC. The two of us gutted this house, redid it. So, yes, we put a lot of sweat equity into it. But even if you buy a turnkey property again, every market's different but odds are like it's going to appreciate. So, building that equity over time. And then you know, a few years down the road, no, it may not be $200,000, but you might be able to take $20,000 out and even $20,000 can help you get into another property. So reducing your income or reducing your expenses and helping build that equity.
Joseph Marohn:Yeah, you know, what's smart about it is that, let's say you're used to paying anywhere from like a $2,500 to $3,500 for rent. You can buy a house, use an FHA loan only put three and a half percent down, which is roughly what like $17,000, $18,000 for a $500,000 home Then turn around and house hack that property and cover most, if not all, your mortgage. You might even cashflow right. So then what you do is pretend you're still paying that $3,500 for rent by paying yourself and putting it into a savings account. Now you're essentially saving $30,000 to $42,000 a year. It's crazy what you can do with house hacking.
Lisa Moore:Yes, it's such a powerful, powerful option within real estate that I encourage everyone I talk to if they're looking to get into it or even if they're already into it to house hack. It can be so valuable to building your wealth and saving money.
Joseph Marohn:Not only that, it's a good combination. You mentioned that your husband's a GC. I mean you're an investor GC. That's a deadly combination, right it?
Lisa Moore:is yeah, we are like a little power couple with him on the side. My background is financial analysis, so I'm all the numbers and business side of things. So it was a good meeting of him.
Joseph Marohn:Well, you guys are definitely doing the right thing. You make a good duo. So what are your top tips for finding a property that is ideal for house hacking, especially for those with limited experience?
Lisa Moore:So the first is decide are you looking for a property that you want to rent out the bedrooms in, or are you looking for a property that you don't want to have to share your space and you want it to have a separate unit? So, whether that's buying a duplex, triplex or fourplex or just a single family that has a mother-in-law apartment. So the first decision is do you want to rent bedrooms or do you want a separate unit to rent? If you're looking to rent bedrooms, it's really, of course. I started with a two-bed, one-bath. It would have been nice to have a second bathroom, but it still worked. But that's something to decide as well. Are you willing to make that sacrifice and share one bathroom if that's all you can afford, or can you afford a house that has two bed, two bath, or three bed, four baths?
Lisa Moore:So really figuring out how much you can afford again, but how you want to rent it, and then finding a house that fits that Like if you don't want to share a bathroom, I can get that find a house that may have two bathrooms. You know the house that we're in now. If we wanted to house hack, it would be good because we have our own master bathroom and then the our second bedroom has, you know, has a bathroom as well. If we wanted to house hack even the unit we live in, but that's to me the biggest thing do you want to share space or do you want your own separate unit? And then from there it's just deciding where you want to live, how many bathrooms you want to have. It really is any house, in my opinion, can work as a house hack. It's just what are your requirements and what are you really looking to do with the house hacking?
Joseph Marohn:Are you still house hacking now? Do you house hack the property you're in?
Lisa Moore:We do so we. When we bought this, we specifically bought it because we could build out the basement. It already had a bathroom, one bathroom in the basement. It supposedly had a kitchen it was a little bit of a stretch advertising as a kitchen it had like one. It actually had two rooms that had kitchen cabinets in it, but that was it. No water, no, nothing, literally just cabinets sitting against a wall. That was it. No water, no, nothing, literally just cabinets sitting against a wall. But we built that out into a two bed, two bath apartment. So we rent out our basement currently and still still house hack.
Lisa Moore:So it's hard to stop when you live for like a couple hundred bucks. We do want to buy a new house now that we're both working from home. We do need more space and we both need our offices. We're making it work with where we are because this is where we are and it's our only option. But we would like to get another house that's bigger, but it's we think about. Ideally, we wouldn't house hack the next one, but it's also. When you look at living for a couple hundred bucks a month, it's like, oh man, it's kind of hard to give up house hacking once you get a taste of it and you live for so cheaply.
Joseph Marohn:I think once you get introduced to it and you see how it works for you, it's hard to see it any other way. Now, right, it's like every time you look at a property, I bet you're looking for those aspects where you can implement it into a house. Hacking property, yeah.
Lisa Moore:Even though we're like we prefer not to share any space. We are actually looked at a property and it had like an outdoor area and we're like, oh, we could build an ADU back here so we could still house hack, put up a fence. It would be like just any normal neighbor but not have to share any walls. So, yeah, any place we looked at, we're immediately like how can we generate income from this property?
Joseph Marohn:Right, and I think the ideal situation if privacy kind of is your biggest concern is having, like, maybe, a front house and a back house with a long driveway, whereas you know you have a gate and you never really see that person right Besides them coming in and out of the driveway. So I think that's a good situation right there as well.
Lisa Moore:And we owned a property that was just like that. It was the one lot, but it was two separate houses and so there was no shared space. We didn't we didn't house hack that one. That one was just an investment. But for something that was looking to house hack like to me, that was such a perfect property because of that it was. You basically had your own house and it was a good size lot. So that other house. You still had your own yard. There was a good size lot, so that other house. You still had your own yard. There was a fence. It was just like any other neighbor and any neighborhood where you've got houses.
Lisa Moore:So that's definitely the ideal to find something like that.
Joseph Marohn:So, as you know, there are some states that some investors typically stay away from, like New York and California, due to their very strict rental control laws. Are there any markets where house hacking wouldn't work as well, and what are some key factors to consider when choosing California due to their very strict rental control laws? Are there any markets where house hacking wouldn't work as well, and what are some key factors to consider when choosing a location?
Lisa Moore:So I'm sure, obviously I'm not familiar with every market, but I know that in some areas in Utah, like technically, you're not supposed to have more than a certain amount of people living in the house, and so there are definitely some areas that may have those restrictions, depending on the law. We often are in the, you know, go for it and ask for forgiveness if something happens, like my husband. The first, one of the first properties he bought it was a duplex. It was two separate entrances, like it looked like it was built as a duplex. Even to this day we're like I don't know where this would have had an interior staircase without major structural changes, like separate meters, everything.
Lisa Moore:And he bought it and then years down the road, somehow it came up. Oh, he was trying to get a HELOC against it and it came up that it wasn't a legal duplex. And they came in. They're like, well, you can't be renting like this. You can't, you can't rent it. And he's like can I have roommates? They're like you can have roommates, but they can't pay you rent, but they can help you pay for your expenses, which is basically the same thing.
Lisa Moore:So, he's like okay, I'm not renting it, I just have roommates that help me pay for my expenses. And they're like, okay, that's fine. So in some situations there can be a fairly easy workaround, but again, like that's, if you don't know the laws, you can research them and find out. Most of the time, though, house hacking short of you having five, six, seven people there, it's just kind of chaos and your streets always filled with cars, the odds of a place not allowing it. Normally you can always have a few people living there. From our experience in markets that we've been in, at least, and looking at a market to me, if you're wanting to live there, then somebody else is. So I don't think so.
Lisa Moore:House hacking is something that you have to be really strategic on. Market-wise, it's not like okay, if I want to invest in mobile home parks, well, you can't just invest anywhere. You have to invest where there is either mobile home parks for you to buy or there is the demand for that. So there are some things that are going to be a little more strategic, in my opinion, house hacking.
Lisa Moore:Most people are going to live in areas that other people want to live, again, short of you living in the middle of nowhere, but otherwise the odds of you not being able to house hack where you're located, in my opinion, is pretty slim. So for me it was where do we want to live? What do we want out of the house? It's buying something that we want in an area that we want to be, and we've never had an issue renting out any of the house hacks. And there's been, I think, six properties that we've house hacked between the two of us and never had an issue finding anyone, whether it was just a bedroom or whether it was another unit. We always found tenants.
Joseph Marohn:Yeah, and see, I'm actually from California and it's like you know, rent here and mortgages here and house prices is just extremely through the roof. So it's almost like you have to get creative and we're seeing it all the time now with a lot of people are, you know, they're adding ADUs to their backyards and you really have to get strategic, like getting in a duplex, maybe renting out to a family member. You really have to like think outside the box to survive out here because the prices are a lot different compared to like the Midwest and you know as other states, where you know it's a lot cheaper and cost of living.
Lisa Moore:Yeah, yeah, utah is not quite as expensive as California, but we're I feel like we're we're chasing after you in that regard pretty hard right now and I feel like it was always. You know they talk about it used to be so much easier and in some regards, yes, you know there are aspects that it may have been easier to purchase a house 10, 15, 20, 30 years ago. But I was talking to a friend who bought a house 25, 30 years ago and she's like didn't even dawn on me until talking to you. She goes, I house hacked, she goes, and that's how I afforded a house and this was 25, 30 years ago.
Lisa Moore:So I think it's always you talk to anyone when they buy a property and odds are, no matter how long ago it was. They probably felt like it was a stretch to buy it and they were a little worried Is it going to work? It seems expensive, things like that. And then you look back, you fast forward 10 years and look back and when you bought it and you're like, man, I got to steal for that place.
Lisa Moore:So if you can buy something and find a way to be able to house hack it and make it affordable. I definitely think that is so valuable and I think that it's always been difficult to find and afford a property. Different aspects now make it difficult in different ways, but interest rates really aren't that high. You look at them historically and we're kind of right in with average historical rates and things like that. So I think if you're willing to put the time in and you're willing to dedicate and kind of make those sacrifices, you can definitely find something in your area. It may not be the five bed, four bath. You know giant, beautiful house that you want to live in that's brand new. But if you're willing to live in you know a smaller property for for a time being, it's a great way to get started being.
Joseph Marohn:It's a great way to get started. You know, what's funny about it is that somebody is going to be listening into this episode and they're not. They're going to realize that they were probably already doing house hacking and not even realizing it, right? You know, it's like. It's like a real estate strategy that people do all the time without even knowing they're actually doing a real estate strategy.
Lisa Moore:Yep, exactly, they're like oh wait, I did that, or I was. You know, I rented a bedroom from someone, or something like that, and yeah.
Joseph Marohn:Right, and so you know we did talk about you know you don't only have to use a single family home, but let's say you know you are a first time house hacker. What would you recommend renting out Would?
Lisa Moore:you recommend renting out individual rooms to start out or separate units in a multifamily property. I don't think one or the other is better or worse. I think it's just figuring out what works for you and what you can afford if you're in an area. If I could go back and start investing whether it was when I first started, back in 2017, or go back to when I was right out of college I personally would have tried to get into a multifamily. I would have tried to buy a duplex, triplex, ideally a fourplex, just to be buying a larger asset and knowing that that was going to grow more, and then be able to move out of that every year or two and buy another one. But I don't. I wouldn't say that, starting with a single family, I guess benefits of both. If you do a single family and you're renting bedrooms, you're going to be the one managing it.
Lisa Moore:You're going to be the one dealing with tenants, you're going to be the one that has to handle all of that.
Lisa Moore:If you don't want to do that, if you have a separate unit or you buy a duplex, triplex, fourplex, you can hire a property manager and if you're in a multifamily you may not even talk to your neighbors. But if you do, you don't have to tell them that you own that property. You're just another renter If you don't want them to know that you're the owner. So if they have an issue they start coming to you. You just, yeah, this is the property management company and yeah, yeah, that's that's who handles everything. You don't have to tell them that you live there. So if you really don't want to deal with tenants and have that, looking for a multi-family might be your best bet and then just have that other units property managed and you never have to tell anyone that you're the owner and they'll never know, and you can just live there like it's any other apartment that you're just a tenant in and not have to deal with anything.
Joseph Marohn:Right. I wish I would have known about this when I was younger and started earlier. When you like you said earlier, it's like when you look at your biggest expense, without a doubt it's that monthly mortgage payment. Right. If you can save that and put it towards other investments, you're absolutely winning.
Lisa Moore:save that and put it towards other investments, you're absolutely winning. Yeah, I know, I think if you go back and have at like 22, you are able to buy your first property with a 1% down and lower your expenses by house hacking and, every year or two, move out. By the time you're 30, early 30s, you could own three, four, five properties from saving up like that money. Instead of you paying that rent to an apartment building, you're paying it to yourself to save up for your next one and buying that. It's like man. You could have three, four, five properties by the time you're 30, early 30s. And now you're renting all those other ones. And keep in mind they all will have the primary residence financing, which is going to get you lower interest rates as well.
Joseph Marohn:So Exactly, you know you. You did mention earlier about, you know, landlords and property managers. For those that don't have much experience, or any experience at all being a landlord, how do you balance living in your own home while also managing it as a rental property?
Lisa Moore:So that can definitely be a learning curve. You know, I had no experience when I started and it was just like, well, we'll figure it out along the way.
Lisa Moore:And you know, and now there's so many resources so you can read about it. You can listen to podcasts, bigger pockets and things like that to find out how to be a landlord or go to local meetups. But it is definitely something that when you are looking at something to keep in mind. Like I said, if you have zero desire to do that, maybe buy a multifamily, but if you're willing to learn how to do that, I also think it's really good because now that we are more heavily into investing and we have property managers, having that experience of knowing how to manage my properties, how to deal with tenants, how the leases work, all of that little intricate details that you really don't learn unless if you do it. So now that we have a property manager, I know what to look for.
Lisa Moore:I know the signs of something doesn't seem right or there's issues or whatever. So if you do plan to like, build and grow and even if you're like I, have zero desire to be a full-time landlord the rest of my life, I still think it's really valuable to to learn and are you going to make mistakes Of course, you're never going to stop making mistakes but to learn how to do it and with so many resources now. I actually think it's. It's really good to have that experience. So as you do grow, you'll know what to look for when you're looking at a property manager. If you're investing in a syndication, you have an idea of how it works. So if somebody's saying something you're like that doesn't really seem right on managing a property or whatever it may be, it just gives you that knowledge and that experience that, to me, is so valuable.
Joseph Marohn:Yeah, you know what? I think a lot of people want to get into investing and they're just so risk adverse, you know, and they're always like I got to know everything before I get started. Like you just mentioned, there's nothing wrong with going and making a mistake. Sometimes you got to make mistakes to learn from them and learn how to overcome that. And what better way to start out in real estate investing than house hacking, right? House hacking is a great way to get started. So good point right there. How are you advertising your rental spaces? Are you using AirDNA? Are you using social media?
Lisa Moore:So now we do just long-term rentals. We dabbled in the short-term space. That is not for me. I'm one that fully I accept what I'm good at and what I'm not good at, and short-term rentals, just not something. We do want to buy a couple. We want to get one in Hawaii and one in Wyoming and I will gladly pay whatever it costs to have somebody else fully manage it.
Lisa Moore:So we focus just on long term tenants and we yeah, I mean we've post on Zillow Facebook. Here in Utah there's a website called KSL, sort of like a Craigslist, but more local, just those different avenues. And for us we've also been really lucky that we've really prided ourselves when we were managing on being really good landlords and having space that people want to. Else in that building is like, hey, I have a friend that's looking for a place and I know that so-and-so is moving out and you know, can you, can you hold off and see if this person's a good fit? Or tenants that used to live with us that moved into other places, then call us and are hey, I'm looking for a place again. Do you guys have anything available? So there's been quite a few times where we've never even had to advertise because we either had somebody referring friends to us or we had prior tenants calling us back looking for a unit.
Lisa Moore:But if you don't have that and you're getting started the Zillows, the Facebooks, craigslist places like that and you can use Zillow. So if you use Zillow, you can post your property on there and Zillow can do background and credit checks for you. So somebody applies, you can tell them go onto the Zillow and do the credit background check. They pay for it. Nothing comes out of your pocket. Then you just get an email and it's in your Zillow profile area that will show okay, so-and-so has submitted their credit and background check. So you can make sure that who you're renting to they have good credit, or you at least know if they don't have good credit and you can do additional research and if they have a criminal record and what their background is. So Zillow is a really good resource for that, just to be able to kind of do everything in one spot, be able to post your listing as well as have them go there and get that credit and background check so you can have a little more information on who you're looking to rent to.
Joseph Marohn:So was it the turnover rate that you didn't like so much about short-term rentals.
Lisa Moore:Yeah, I mean just always. It's to me it was a very I mean it is, it's very active, it's hospitality. So you're just if you have somebody you know checking out this morning and somebody checking in this afternoon, like you need to have your teams in place. You're cleaning all of that stuff. When I was renting a bedroom in my house way easier Like I keep my house clean I didn't have to worry about like flipping an entire house. I just needed to make sure that there is a new set of sheets, and that was super easy as soon as it involved us having to travel to a property and I wasn't even working at the time in 2018.
Lisa Moore:Um, I the job that I was at. I quit the job. We didn't. I didn't work for six months. We did a road trip for a couple months and when we got back it was the beginning of November. I didn't want to start looking for a job because it was holiday season. I said I'm not going to start working now. So I'm like I'll push this off and wait until the new year. And we had somebody move out and we heard so much hey, you can make so much more with Airbnb. So with me not working. We said this is the perfect time to try it. I've got the time to do it. We have a property that somebody is just moving out of like let's give it a whirl.
Lisa Moore:And yeah, I did not enjoy. I did not enjoy the constant active and the cleaning up after people and just having to just the communication all the time. And you really do have to kind of always be available if you're the one that's managing it and with our, the way we are in our lifestyle and our traveling. We're big outdoors people, so we're out in the woods and in the mountains with no service, quite a lot, and that just doesn't work. If you're managing Airbnbs, long-term rentals it's not as big of a deal. If we put a place up and we're out of service for two days, we'll get it when we get back. But for short term rental, I mean, you're needing to respond quickly and be be available at all times. So I would. I am definitely someone who will gladly pay the large fee to have somebody else manage any short term rental I ever buy.
Joseph Marohn:You're like let me get lost in the woods and don't bother me, right yeah?
Lisa Moore:Yeah.
Joseph Marohn:So what are some of the risks associated with house hacking and how can we mitigate those risks?
Lisa Moore:The tenants, just making sure you screen your tenants really well. Like I said, there are a lot of resources out there. Now you can use Zillow to get a background check and a credit check and talking with other landlords and other investors, and you can even hire people. Like, if you're really concerned with how you can fill someone, how you can fill a vacancy, you can hire property managers just to fill a unit. If it's a bedroom. You might have a little bit of a hard time, but you can at least talk to property management companies. Will everyone talk to you? Maybe not, but if you call around and ask or just start going to investor meetups, find real estate meetups in your area and just start talking to people and like, hey, what do you do to screen your tenants?
Lisa Moore:That is definitely the biggest thing is making sure you screen your tenants well. And if you're going to share space, so if you're going to rent just a bedroom and you need to make sure you set your boundaries at the beginning, whether that's short-term rentals or long-term making sure that you you know to the extent of having signs up of don't leave dishes in the sink, clean your stuff, put it in the dishwasher, whatever it may be, and even assigning, if you want to get really not have to worry about whose food is this and whose cabin. Is this in your fridge. Mark your. Mark your shelves. This is room one. This is room two. This is room three.
Lisa Moore:Do the same with your cabinets. So if somebody comes and whether they're staying there for a few days, a few weeks or they're a long-term tenant, like anything in the shelf belongs to room one. Nobody like this is your space, so you know that anything you put there is yours, same with the cabinets and stuff like that. It sounds like it might be overkill, but knowing that this is somebody's space and whatever is in here belongs to them, it really does help alleviate a lot of potential issues and it makes people like they know that, okay, I'm not going to come home and the fridge is going to be packed full and I just bought $50 worth of groceries and now there's no room in the grocery, in the fridge, for me to put any of my stuff because the fridge is full. Put any of my stuff because the fridge is full If you always know how much space you have in your drawer, in your cabinet, so you can plan ahead and make sure you're uh stay in your finger space.
Joseph Marohn:I don't know where you're shopping, Lisa, but $50 of groceries doesn't get you much these days.
Lisa Moore:No, it doesn't. It doesn't. That would be like maybe a few days worth of groceries.
Joseph Marohn:No, but it's a good point though, and hopefully that's a great advice and hopefully people respect your space. If you're doing those shelves things idea, make sure they're really respecting your space. So can you discuss any legal considerations or maybe even challenges that might arise with tenants?
Lisa Moore:I mean tenants in general. There's always, you know the the big thing, obviously making sure you're not discriminated against to you rent to in Utah and my guess is other states are similar to this, but at least in Utah, when somebody applies to one of our apartments, we don't pick and choose who that is. So we have our requirements. Okay, you have to have a credit score above 650. If you don't, then we need references from prior landlords. You need two and a half X your income. So, like, we have set requirements on what people have to hit and it's a first come, first serve. So whoever applies that order of applications, we just go through. Do you meet all the requirements? Yes, okay, then we, you know we'll move forward with getting background checks and interview and things like that. So, making sure that you're following any guidelines and any rules and regulations locally.
Lisa Moore:If you're house hacking, it's the only property you own. They typically are a little looser on things because it is your own house, like dogs, pets, you know we can't say no to service animals. If you're house hacking and you're allergic to a cat or a dog, you can deny that because it's within your house and you can't have somebody living there that you know you're allergic to the pet that they're bringing in. So you do have normally some a little more leeway when it's your own property and your house hacking. But tenants you definitely obviously making sure you don't discriminate and making sure you take care of your property and you're not opening yourself up to any legal things.
Lisa Moore:You know making sure it's safe, making sure you have smoke detectors Although so many tenants take down the smoke detectors or take the batteries out of them when we go and do checks and we're like smoke detector I know this was working when we had you move in, but just making sure you're doing those safety checks and things like that. So there's nothing that, if god forbid something was to happen, you know there's no smoke detector, there's not a fire extinguisher or whatever it may be. So just making sure that you supply safe places to live definitely will help. But also putting your properties into an LLC will give you an added layer of protection as well.
Joseph Marohn:I love that you brought that up. Good advice, good advice how can house hacking fit into a long-term real estate investment strategy?
Lisa Moore:I mean that's been our biggest really helped us get to where we are. We house hacked. With that first property that I bought, as I said, we made over $200,000. We sold that. We bought a triplex. We have been pulling equity out of the properties that we have to buy more assets. We have a fourplex that the money from another property partial another property, also partial private money lender but a good portion of that in the rehab came from another property that we pulled equity out of. We've pulled HELOCs out against our properties. We've done cash out refinances against our properties. We've sold properties.
Lisa Moore:So, even if you're house hacking, even if it's only single families when people say I only own a single family or I just own this, I'm always like cut those words out, no only and no, just like you own that.
Lisa Moore:Those will build equity. And even if it's, like I said, 20, 30,000, well that 20, 30,000 could be a down payment, that could be a rehab on a property that you have or that you partner on with somebody. So just owning those properties and building that equity has helped us immensely buy more and invest in more and be able to do our rehabs, add units, add bedrooms, add bathrooms, add value to our properties. So it's helped us immensely and it's definitely something that you know. I just look at the properties that we own now and even if we stop house hacking in our next property all the houses that we still own that we've house hacked as we sell those, as we pull equity out. All of that is going to be because we are willing to house hack and trade those up into larger properties and just keep getting us larger assets that are going to generate more income for us.
Joseph Marohn:Right, I don't think you're going to stop, lisa. I think it's like once you do it, like we said earlier, you just can't see any other way. You just want to keep doing it over and over again.
Lisa Moore:It becomes an addiction to a point.
Joseph Marohn:So what is the best advice you would give to someone just starting out in house hacking?
Lisa Moore:Don't be afraid to like if you're debating, doing it like, don't be afraid to do it, like, just give it a try. Make sure you screen your tenants. That's probably really the biggest thing is making sure you're screening your tenants. And that's probably really the biggest thing is making sure you're screening your tenants and screening them well. The people that we've met that had bad experiences or don't want to do it again, it's because they didn't screen their tenants or they let a friend move in, they let a family member move in.
Lisa Moore:And it's really hard for a lot of people to set boundaries with people that they know their friends, their family. Somebody's not paying rent, Like, oh, I'll get you next week, Don't like, it's okay, Don't worry about it, I'll pay you next week. And if you cannot say to that person like no, your rent is due on the first, you pay it on the first or you'll be getting notice on whatever day, the third, the fifth, whatever's in the lease. So if you aren't someone that can set those boundaries, don't rent to friends and family.
Lisa Moore:For a lot of people it's easier to set boundaries with people they don't know than it is with friends and family. And friends and family can tend to not necessarily on purpose try and like take advantage of you, but just feel like it's a more casual relationship and not take it as seriously as they should. When it's like this is them paying their rent Like they wouldn't do that to another landlord, they shouldn't do it to you. So making sure you have boundaries and making sure you screen your tenants, I think when you're going to do some house hacking, are probably two of the biggest things.
Joseph Marohn:Oh, Lisa, you got 18 doors. You got it. You could spot me this month.
Lisa Moore:Exactly.
Joseph Marohn:All right. So any new goals you set for the year? What's 2024 look like for Lisa?
Lisa Moore:So 2024 for us. So we are really looking to buy some larger properties. We are looking to buy up to 50 unit assets here in Utah. We really want to look for that generation, the 60, 70, 80 year olds, that boomer generation that is looking to retire, looking to enjoy life and not have to deal with being landlords. As many people listening may or may not know that generation, the amount of wealth that that generation has through properties and businesses that they are going to be passing along, whether that's to family or selling, is huge. So we really want to find a way to tap into that generation and find those people that own properties. You know we'd love to buy 50 doors this year in utah from that demographic. Be great to buy them with seller finance or creative finance, but it doesn't have to be. Um. Some other goals I've wanting to be on podcast. The goal is to be on 24 podcasts this year. I didn't intentionally do it, as 24 podcasts in 2024 didn't even dial it my husband was like, oh, 24 and 24 and 24.
Lisa Moore:I was like, oh, I was just thinking, two a month for the year, um, so being on podcasts and then doing more speaking. I'm the VP of the Utah RIA, so I've had the opportunity to start hosting some panels and speaking and I've really, really enjoyed it. So I'm looking to do five speaking engagements this year. So anyone out there, if you're looking for anyone to come speak at any of your meetups, I am willing to travel. We'd love to travel. So an excuse to go somewhere is doesn't take much for us to to have an excuse to go travel somewhere.
Joseph Marohn:So if you do meet up we're always looking for excuse to travel, right yeah.
Lisa Moore:So yeah. So if you host a meetup or anything like that and you're looking for speakers, I'd love to come. Definitely hit me up and you can talk about it.
Joseph Marohn:That's some great goals you got there. You're really setting the bar high. I love it. Yes. So one of the things that I like to do is give the community a voice as well in these podcasts. So typically I'll drop a post explaining the topic we're currently covering and I'll ask if anyone has any questions they would like addressed. The covering and I'll ask if anyone has any questions they would like addressed. The question I chose today is by Romario Budai, and his question was I would love to sub to my first house hack. Is that possible? What's your response to that?
Lisa Moore:Absolutely. The creative finance right now is you know such such a popular thing because interest rates are significantly higher than they have been the last several years and you can absolutely house hack something you buy sub two. You know those are kind of two separate things. How you acquire the house and what that financing looks like really has nothing to do with what you plan. You know whether you plan to house hack or not. So you can absolutely find a house that you purchased sub to, you own that and you have that asset and now you can house hack. So you can absolutely house hack something that you purchased subject to or seller finance. However you acquire it, you can house hack it.
Joseph Marohn:Yeah, absolutely. I think it's an excellent strategy, right, Because then now you're basically you're purchasing the property, you, if you do it right, you can basically get the property no money out of pocket, Right. And now you're renting the property out and you're you're house hacking it and it's essentially, you know it's covering your mortgage on there and you. It's just a win-win situation. So I think it was a great question. I know some people may not be familiar with, but you know, sub two is just a way of purchasing the property itself, and what you do with it after that is completely up to you. Yep, so I think we covered most of the basics and the groundwork on how to get started with your first house hacking property. Is there anything you can think of that we might've missed and didn't cover here today?
Lisa Moore:Nothing that I can think of. I'm sure as soon as we're we're finished here, I'll be like, oh, I should have brought up this.
Lisa Moore:But uh yeah, nothing I can think of at the moment. We did cover, cover a lot of the the main points and details with house hacking. So, oh, something I do get asked actually is who's responsible for yard work, cleaning, maintaining, maintaining the house, things like that. And if it's, if it's a single family home that you're renting out bedrooms, typically I'll just, you know, communicate with the people, like they're obviously responsible for their own space but making sure they're cleaning up after themselves.
Lisa Moore:If people are sharing a bathroom, sometimes it's not a bad idea to have a cleaner come in every couple of weeks just to clean the kitchen and clean the shared spaces. I've heard a lot of investors doing that, just for the couple hundred bucks a month it costs just knowing that the spaces are getting clean. There's no disagreements on who's supposed to clean it, things like that. If it's you and one other person, it's a lot easier. Like you're doing it this week, I'm doing it this week. And then, as far as yard work, I will say never believe a tenant that says that they enjoy yard work, even if they really are convincing about it. It's a rare tenant that will actually maintain a yard. So do not house hack with the expectation that your tenants are going to maintain your yard. So if you care about what your yard looks like and it will be shared space expect that you will be the one maintaining that yard, for sure.
Joseph Marohn:Excellent advice, Lisa. Where can people get a hold of you?
Lisa Moore:Instagram is probably the best place. My Instagram is more doors with Lisa. You'll see our logo in my profile pictures, so you'll know that it's me. Shoot me a DM there. I'm always posting on Instagram and trying to share as much information and helpful things on there as possible. Facebook is another one lisafieldmore. Again, you'll see our company logo on there, so you'll know it's me. But, yeah, those two are the best places, so feel free to reach out, DM, comment on any of my posts, give me a follow. Love to chat with anyone that's out there that's got questions.
Joseph Marohn:Right, and we'll make sure we plug all those tags in on this video right here so that way people can locate you easier. So well, awesome. Well, lisa, you've been a valuable asset here on the podcast today. I'm sure everyone listening in is going to find a ton of value from what you just shared with us. You're extremely knowledgeable in this space. You're absolutely crushing it, and I think I speak for everyone when I say that we're all excited to see what else you're able to accomplish in 2024. So, thank you.
Lisa Moore:Thank you. It's going to be a good year, so looking forward to it.
Joseph Marohn:Now, if you guys are finding value from this podcast, don't forget to show your boys some love. Literally, it only takes a few seconds to click subscribe. Don't forget to like this and drop a comment down below what you guys learned today about house hacking. I appreciate all the continued support and guys stay tuned because we're pumping these episodes out every two weeks. I got some big plans for the channel this year and I don't want you guys to miss out. Best believe i'ma keep bringing you guys that fire. Thank you, lisa thank you, joseph.
Lisa Moore:Thanks for watching.