Income Suite House Hacking in the Twin Cities:

This week we have a unique episode that incorporates two different styles of house hacking! Casey and her husband were looking for houses around the suburban area in the Twin Cities of Minnesota. They soon realized that houses were being sold quickly in this strong sellers’ market. Casey decided they have to become very specific about the type of house they wanted.

Casey and her husband finally found a single-family home that they would live in while turning the basement into an income-suite. Their strategy was to use this home as a room rental house hack until renovations allowed them to income-suite house hack. This combination allowed Casey and her husband to significantly cut the mortgage down- essentially freeing up money for renovations! Pay close attention to Casey’s strategic story as they tackle this very interesting house hack:

You Can Listen On:


Notable Mentions:

Choose FI 

Paula Pants Afford Anything

How to get in touch with today’s


Guest Website:

Transcript of the show:

Intro (00:03):
Across the world. People have their housing costs taken away as much as half of their income. Have you ever thought of trying to change that? The good news is there is a way house hacking is real and we are here to show you how other people just like you have made it happen. Welcome to the house hacking podcast and here is your host house hacking expert. Andrew Kerr.

Andrew Kerr (00:29):
CJ, thank you so much for being on the podcast today. I’m excited about hearing your story. Uh, you know, where are you calling in from? How you doing today?

Casey (00:38):
I’m doing really good. I’m calling in from Minnesota, just I’m on the South side of the Twin Cities, um, technically in rural, um, a little bit below the suburbs, which is kind of cool. Um, we actually moved back out here in June of last year and we’re loving it. It’s our first snow fall for the year, so it’s, it started a nice transition into, um, the holiday season, which is good.

Andrew Kerr (01:06):
Oh, cool. Yeah. My, my wife’s actually from Minnesota and she’s there right now visiting her mom and uh, she sent me a text last night about the, the snow coming down. So for folks that are listening, we’re actually recording right at the beginning of November. So for some folks that’s early for snow and Minnesota, a little more common.

Casey (01:24):
Mhm, definitely.

Andrew Kerr (01:25):
Yeah. I actually remember when my wife and I met, we were dating, uh, doing disaster response work in Iowa and I went up to go visit her in Minnesota on October one and it’s snowed.

Casey (01:38):
Yeah, we get snow quite frequently in October. I remember as a kid for Halloween ones, you had to wear your costume on the outside of your entire snow pants, snow gear, because we had a giant blizzard for Halloween.

Andrew Kerr (01:52):
Oh my goodness. Yeah. Needless to say, uh, that’s why we don’t live in Minnesota anymore. And I convinced her to move to North Carolina and now we’re obviously in New Orleans. We try to stay as far away from that snow. But yeah, thanks for being on. You’ve got this really cool house hacking story. Uh, maybe a good place to start is can you just give us this sort of high level summary of your house hacking experience?

Casey (02:15):
So back in 2014, um, is kind of where we started our house hacking. So that was when my husband and I were still dating. Um, and we decided to purchase a house, um, that we knew we wanted to make into a rental property long term. Um, so it took us a long time to find it, uh, but we finally found it. And then from there on it was a complete house hack the entire time. We had numerous roommates that lived with us. Um, and since then we’ve actually moved out, found our dream home on nine acres, um, and still have the people that were living with us back then, uh, living in that house now. So it’s made really easy of a transition.

Andrew Kerr (03:01):
Cool. Well let’s sort of dig into this house hacking story that you have. So this is 2014 you and your soon to be husband are dating. Are you guys already engaged at this point? Are you sort of say, Hey, we know we’re going to be together. Let’s buy a house together.

Casey (03:18):
Yeah. So we had been living together for three years in a, in an apartment, a two bedroom apartment, and we knew we were going to be together. We’ve known each other for a very long time. Um, we’ve actually known each other for 22 years now and we’re, we’re 29, so it’s been, it’s been a long time coming. We knew we were gonna be together for quite awhile, so we decided that we were going to buy a house before we got married. Um, and we wanted it to be a rental property longterm. So we’ve specifically, we’re looking for, um, a duplex or duplex like homes or a really good single family home that we could then rent out longterm. Um, and we spent a good eight months trying to find this property and we actually lucked out. Um, we had put offers in on four or five houses. Um, one ended up, we ended up getting, but the inspection found, um, foundation issues. So luckily we were able to back out of that one. And then we found our house in the middle of a rainstorm. They wanted to move quickly. We were the only people that ended up getting to see the house, um, as we put in the offer and they accepted that night. So it worked out very well. Um, the house itself was a duplex. Um, a long time ago. They made it into a single family home with one entrance and had a daycare in the basement or in the lower duplex and lived in the upstairs. So there were still two kitchens, two living rooms, um, kind of a full different setup for both locations. Um, so all we had to do was really put the two front doors back in and split the stairs.

Andrew Kerr (05:16):
Awesome. So you know, I want to sort of go back to this beginning part. You’re in 2014, you started looking in, you knew you wanted something that could be a longterm rental. I mean, how this idea come about? Did you have family in real estate or you know what? Most folks, especially when they’re starting to sort of build their life together, it’s, you know, we want our forever home, or we want a home where we could raise a family, not, let’s go buy a property that’s going to be an investment.

Casey (05:44):
Mhm yeah, I would say I had no prior experience to any of this and I don’t think my husband really did either. Um, but this was his goal, he, he’s very much an entrepreneur wants to do his own thing. And ultimately part of the way he wanted his income was to be a landlord and a property manager. So that’s kind of how how it started.

Andrew Kerr (06:13):
Did, did it take any convincing on your part to get onboard with this or, you know, did he just come up one name, like, we’re going to buy a house that’s going to be an investment property and that’s what it is? Or did he sort of have to take you a nice dinner and say like, Hey, I’ve got this idea, you know, let, let, let’s, let’s think about this. Or what, what was your thought process when he sort of brought this whole thing up?

Casey (06:35):
Yeah. For the most part I would say I have been very ideal of a partner for him. He has huge dreams and my dream is to make his dreams reality. I am the executioner when it comes to any, any of the dreams and ideas that he has. So it didn’t take me that long to get on board. Um, he kind of talked through kind of how typical rentals work, the cashflow and how, um, how longterm this could be a really strong benefit. And I don’t know, I believed in what he was saying or what he was selling that then I went along. I figured if, if worst comes to worst, we just sell it right?

Andrew Kerr (07:24):
I mean, in reality that’s not a really horrible situation. But I mean it sounds like you had this cool partner where you’re like, he’s the dreamer and I’m the one that actually goes and execute and I’m the doer, the builder’s side of it saw me. That’s pretty cool that you have this partnership. All right, so he had this idea, you want to support him on it. What was your living situation like before that? Were you, you were living together and you’re running an apartment, you know, how much were you paying for rent for that apartment and how big was that apartment?

Casey (07:53):
So we had a two bedroom apartment, um, in one of the Southern suburbs of many Minneapolis. Um, so we were paying about 1100 to $1,200. I think by the end it was almost $1,200 a month for a two bedroom place. And we actually lived in what I would call the retirement community. Every, everybody in our apartment complex were in their sixties to eighties. Um, we maybe had two families there. So it was very much a quiet place. We, we didn’t like to be close to any of like the downtown amenities with, um, all of the other things. So overall it was a least expensive apartment, but still gave us the two bedrooms and a quiet place to live.

Andrew Kerr (08:56):
Cool, so you spent eight months looking for a house. I mean, and this is back in 2014. So it was just the Minneapolis market really picking up at that point.

Casey (09:05):
Yeah, yeah, it, um, it was very competitive. Um, basically anything that we saw if you didn’t put in your offer, um, at that point you weren’t getting it wasn’t there the next, the next day. Um, and again, back in 2014 I feel like it’s very similar to how it has been this year. Um, and Minnesota where every house had five to six offers on, on it. So it’s definitely a sellers market, um, back in 2014, um, as we were going through all of it. So it was very competitive. So you had to continually be open to visiting places every day if you really liked something, you had to go and see it that day and make a decision. Um, so we were very specific about what we were looking for, which made it easier for us. And I think even for our realtor to find the right deals for us.

Andrew Kerr (10:10):
Yeah. You, you sorta gave your realtor all these filters and requirements, so that way you weren’t wasting your time looking at a million different things, but really specific stuff, uh, to, to actually go look at. So you had mentioned before you sort of found the house that you ended up buying, you actually went under contract on one and then backed out with the foundation. Can we just touch on that a little bit because I think there’s two important points there. One is this sort of inspection period and then two is actually walking away from a deal that’s not a good situation. So you got this property under contract. Explain to me a little bit about the due diligence process and what she ended up finding and why you decided it wasn’t a good deal.

Casey (10:52):
Yeah, so as we were going through the process, we found this place that would work well as a good rental property longterm, um, and we could even split a section out and have kind of a mother-in-law suite. And so it was a pretty good deal to us visually as we were going through the process. So we wrote up in an offer and thankfully, um, our realtor strongly suggested that you go through an inspection process and pay an inspector to review the house and make sure that there isn’t anything that you didn’t see yourself. Um, and we did that and the inspector noticed that the foundation in the garage was crumbling and he was also a contractor, an estimated out the work that would have to be done to basically lift the garage and fix the foundation or tear down the garage, tear out the foundation and start back from scratch. And it would have cost us basically the price of the house almost. It was outrageous and so right, it just wasn’t worth continuing on. So luckily I think our inspection cost was maybe like $300 or $500 something. Something’s in there, saved us tens of thousands of dollars and made it easier to walk away. And, um, luckily for us, we noticed it and we requested that they put that in for future, um, future people. Because you may, you may notice something in as you’re going through and looking at houses that the homeowner doesn’t know or that the real estate agent on their side doesn’t know. So they’re not including it as part of the offer, the agreement, knowing that there are these types of issues.

Andrew Kerr (13:00):
Yeah, yeah. But better. I think it’s a great tip though that you actually went in, your realtor encourage you to spend that four or 500 bucks or so on the inspection and it’s better to lose that $500 then get into a deal that could set you back tens of thousands of dollars. So I think that was really smart that you walked away. I know sometimes folks get so emotionally attached to a property or sometimes the rational side of our brain doesn’t think very clearly. So yeah. Thanks for just touching on that point. But you know, let’s go on to the property that you actually found. So you spent eight months looking, you went under contract on a deal, you didn’t close, had foundation issues, you backed out, you know, did that discourage you from continuing to look or did you basically sort of pause for a moment and said, we’re, we’re right back in it, let’s keep looking.

Casey (13:45):
Um, it did discourage us a little bit for maybe a couple of weeks to a month. Um, it became really hard. Um, we, we got that house, the first house that we put an offer and we ended up getting it fairly quickly and it was a lot easier. The next house that we put an offer in, we were one of five and lost it. And then the next house we were one of other offers and we lost that one too. So it became more of this discouraging as we went. We finally got one and it didn’t work out. Um, and so my husband actually didn’t even want to see the property that we ended actually ended up getting. I said, this is the perfect place for us. And he’s like, I don’t want to do, I don’t want to go through all of this again. At this point. We’ve, we’ve placed offers, we’re not getting them. There’s so many people. It’s so competitive this place, the way that we’re looking at it and what it can offer, it’s going to go way above asking and it’s not going to be worth it. And so I said, well, let’s just go. We’ll take a look at it and we’ll, we’ll see. We might as well try. This is the exact, it was one of those things where you create your, your wishlist of everything that you want in a property. And this one had everything. I was like, there’s no reason that we should just not try to look at it.

Andrew Kerr (15:17):
Well, it’s great when you have that partner that even if one of you gets discouraged, the other one is staying positive and helping push and pull each other forward. So you went to go look at it and you mentioned a rainstorm.

Casey (15:28):
Mhm, yup. So it was actually a really bad thunderstorm, um, that day, and so we ended up going in the pouring rain traffic is really bad and when, uh, whenever it rains or snow traffic is always horrible. Um, but we went down and saw it with our realtor and absolutely loved it. And so we put in an offer that night, uh, because we knew that this was still a very competitive environment and they actually responded within two hours of us placing our, in our offer, um, saying that they would take it. So I don’t, I don’t know what their situation was, but it sounded like they needed to move very quickly. So we really lucked out and, and the opportunity, and I don’t think anybody else got to even see the property cause it was posted. We went and saw it, um, and it was during that rainstorm. So nobody else really went out that day. And yeah, it worked out perfectly for us.

Andrew Kerr (16:37):
So a lot of persistence and a little bit of luck helps you get the house that checks off every single box. So what were some of these things that were actually on your checklist and why did you say like, this is the perfect house for us in our sort of situation that we want to be in?

Casey (16:51):
Yeah, so we were looking specifically at, um, houses in the suburbs of the cities. Um, we wanted it to be more in a family neighborhood and overall we were driving through the different neighborhoods quite a bit. So we narrowed it down to a specific city, um, which ended up being Prior Lake, Minnesota. And overall we knew kind of the different areas that we liked. And this one was in that area. It had, um, the opportunity to be built into a duplex and it still was zoned as a multifamily home even though it was a single family. Um, so we ended up getting the benefits of not having other investors look at this property because it was marked as a single family home, but it had the two kitchens. It still had the two living rooms. Everything was all set up for it being a multifamily, um, location. And that was really ultimately what we wanted, um, was a multifamily options so we could live in one side and work on the other or live in one side and rent out the other and give us more flexibility to choose how we wanted to live by ourselves or um, with people longterm too.

Andrew Kerr (18:16):
Cool. So after spending eight months of looking, lot of ups and downs, you closed on this property, do you remember roughly what she ended up buying it for?

Casey (18:27):
Um, we ended up buying it for 190. Um, overall it was really nice because we were first time home buyers. So we’ve, we ended up getting those benefits as well. Um, and our down payment was only about like 7%, so it wasn’t something where we ended up having to do the 20% down. Um, making it a really a really easy opportunity for us to find the right mortgage options options to.

Andrew Kerr (18:58):
Yeah. All right. So when you bought it, you put the, didn’t have to put down a ton of a down payment. Do you remember at that time what, what was roughly your mortgage payment on the property?

Casey (19:09):
Um, our mortgage payment was $1,300, so just a a hundred dollars more than our rent. Um, overall. So it became very doable and it was, it was pretty much laughable at that point with a a hundred dollars difference. You own the property versus what you’re renting for.

Andrew Kerr (19:30):
Yeah. And, and did that 1300 include your taxes and insurance?

Casey (19:34):
Mhm that included the, um, property, mortgage insurance and the homeowners insurance taxes, everything.

Andrew Kerr (19:44):
Yeah. I mean, that’s really, really reasonable where you’re like 1200 to 1300 and actually owning the place and you’re going to get some principal pay down and hopefully appreciation over the long run. I mean, so that seems to me very reasonable. If this was going to be just a normal single family house that you’re going to live in, but this had a lot of different opportunity, you know? So what was the makeup of the house? It sounded like there was a downstairs unit and an upstairs unit. How many bedrooms and bathrooms were, were in the property total?

Casey (20:13):
Yeah. So I’m basically the upper level is one unit or ended ended up being one unit, but it’s a two bedroom, one bath, um, kitchen, dining, living room space. And then the lower level is basically a mirror of that. Um, but only a one bedroom, a large walk in closet that has the utilities for the entire house in it. Um, otherwise it’s got the same same layout. Um, laundry, bathroom, kitchen, living around kind of the full setup as well with a walkout garage. Um, so the lower level gets ’em to walk out directly into the garage, which is a major selling benefit, um, to renters who live here in the winter. You don’t have to to go out and start your car or walk outside. So you get to your garage and experience the cold. You can just walk in straight from straight from your house into the garage.

Andrew Kerr (21:13):
Yeah. Yeah. All right. So when you bought the house, did it actually need any work or was it sort of pretty much a move in ready condition or did any cosmetics or need a ton of renovation?

Casey (21:26):
So overall, um, the house, the upper portion didn’t need any renovation. They, the homeowner before us spent a lot of work, um, renovating the upper level. Um, and then they ran a daycare out of the lower. And so that one needed a lot of updates. I would say overall it, it looked fine. Um, but if we really wanted to maximize the rent, um, from that we wanted to definitely redo the kitchen. Um, basically our, the house itself was born or was built in the 1960s and so it still had the same sixties designed kitchen and the lower level. Um, so we actually started with remodeling the lower level, lower level kitchen since we already had a usable upstairs kitchen.

Andrew Kerr (22:21):
So you moved right in from your apartment into the upstairs and then started working right away on the downstairs?

Casey (22:27):
Right. Yep. Um, and actually the way it was all set up is that the upstairs and the downstairs were connected when we first moved in. Um, so it became essentially one, one large house where you walk in the front door and you can choose to go up six steps or turn the corner and go down six steps. So we were still using the lower level living room, um, using that bedroom and that bathroom. And since we were just two people, um, and we have quite a few friends who were just graduating from college, um, and moving up to the cities. We lived in a rural area growing up and so a lot of our college friends ended up wanting to move to the cities as well and ended up living with us for awhile. Um, so we had a three bedroom place that ended up having two roommates the entire time we were there. Um, as we remodeled the kitchen and things, it ultimately just determined where we were sleeping and the upper level or the lower level.

Andrew Kerr (23:42):
Okay. Okay. All right. So you’re living in this soon to be divided into a duplex or basement apartment and you’re renting the two other bedrooms. What were you renting those two other bedrooms for?

Casey (23:56):
Um, 450 each. So for a total of $900. Um, so bringing our, our overall mortgage payment for us, for the two of us down to $400 total.

Andrew Kerr (24:07):
I mean, that’s crazy. You went from $1,200 a month in rent to now your housing costs being $400, and now you’re freeing up all this cash, which is great if you’re trying to renovate the property. Now all of a sudden your housing costs are drastically lower and now you’ve got more room in your budget to put into the house.

Casey (24:26):
Right. Exactly. And so when we renovated, um, that kitchen, we did all of the work ourselves and paid for it out of pocket from the money we were saving, which, um, which was huge when it came to the actual, the process of, of making the full transition. And that was really the largest piece of the renovation. Um, we did end up changing out the, the lower level bath tub. Um, shower walls were a little dated and old as well, so we retitled that, um, and really just updated the majority of the house with paint, which was a big change. Um, overall painting makes a huge difference.

Andrew Kerr (25:13):
Yeah. It’s crazy what a fresh coat of paint can, can do for a property and make it look good. All right, so you’re renovating the property. You’ve got friends that moved up, they’re renting the two rooms, you’re bringing in 900 from those two friends. Did you have your friend sign a lease or was it more of just, Hey, your friends, you can move in? It’s 450 a month.

Casey (25:34):
Yeah, we started it off, um, very, very much that way. Um, no lease, your friends, move out whenever you want. We’re, we’re here to help you just as much as you’re here to help us transition as you go. And so we ended up being kind of the way point for a good chunk of our friends that actually moved up to the cities. We went through, um, three different friends, um, throughout the entire time that we were there. And then one friend ended up having his brother wanting to move up. So once we got to people that we didn’t necessarily know as well, that’s when we started, um, doing the lease, writing out rental agreements. And things like that too. And the other piece of it, um, as we were getting later on into our experience and getting ready to make it into a final duplex and renting help both sides and moving out, um, we talking to our mortgage consultant, um, and they suggested making sure that you have at least two years of rental income and having it reported as rental income with rental leases and agreements to be able to show that as part of your general income.

Andrew Kerr (27:04):
Yeah. And I want to pause there really, really quickly. So you touched on this great point. And so for folks that are listening, the reason why you want that two years history, so when they’re gonna move out and go buy the new house, they don’t want to have the mortgage affecting their debt to income ratio. And if you don’t have those two years of landlord experience with two years of reportable income, now they don’t have anything to offset that mortgage and it’s going to make it really difficult to buy that next house. And I’m glad you talked with your mortgage consultant. Cause a lot of times when folks rent to a friend and just rent the room, they’ll say, Oh great, you know, you’re paying the four or $500 in cash, whatever it is and I’ll just pocket the money and I don’t report it. And then when you don’t report it now it’s not on your income and you can’t have that higher income level to qualify. So I’m really glad that you mentioned that. Uh, so thank you for, for sharing that out of those really smart that you’re able to talk with him about that.

Casey (28:01):
Yeah, and we ended up even for those who want to move out more quickly than your two years would allow. Um, we ended up meeting with an accountant that readjusted our previous year’s taxes. Um, so for our taxes in 2016 even though we filed them, we reported some of the income, but we didn’t have it as like a full rental opportunity at that point. Um, we talked to an accountant and had him redo our taxes to reflect the rental as a business itself and included it as different types of income. Um, which you can kind of go back and update that if you need to.

Andrew Kerr (28:52):
Yeah. So it costs you a little money in taxes, but what it did is let you then be able to qualify for a bigger home.

Casey (28:59):
Yup, exactly.

Andrew Kerr (29:01):
All right. So when you’re, you didn’t use leases to start with, then you moved to leases. How’d you collect the rent? Was it just, you know, it’s around the first of the month. Write me a check. Did you use any sort of electronic transfer or any sort of software? How’d you do that?

Casey (29:18):
Um, so starting out we were just using checks, um, back in 2014 and as technology has changed, we then started using Zelle, a lot of, um, major banks, Wells Fargo, us bank, um, a couple other more regional banks. Um, use Zelle that you can transfer money from your account into somebody else’s account. Um, so that’s what we ended up using towards the end and what we actually still use today. Um, other people are more familiar with like Venmo or PayPal and those types of things too. Um, so we use those depending on what the renter prefers. But either way it’s an automatic transfer versus a check in the mail at this point.

Andrew Kerr (30:13):
Yeah. All right. So you bought it in 2014. How long was it then till you formally converted it back into a duplex or had like a true separation between the upstairs and that downstairs basement apartment?

Casey (30:28):
Um, so we actually just converted that in actually may of 2019. Um, so we, we officially moved out of the place and June of 2018 and ended up keeping the chunk of our tenants are, our friends and roommates stayed. So as they have moved out, we have then started doing smaller renovations and tweaks, repainting or redoing flooring and um, we finally only have one person that wanted to rent just the upstairs. So we were able to then now fully split the, split the duplex back into one, um, based off of reducing the number of people as they went.

Andrew Kerr (31:26):
Okay. Yeah. So then when you moved out back in June of 2018 you put in another friend in that third bedroom, did you charge them 1450 as well?

Casey (31:38):
Yeah, so we, we charged everybody 450 a month. Um, and then they also were in charge of utilities.

Andrew Kerr (31:47):
Okay. And the, the three people there just split the utilities. Okay, great. So you’re bringing in like 1350 a month for the property in your mortgage on it was 1300 so you’ve got a little bit of profit in there. You’re, you’re breaking even on it essentially.

Casey (32:05):
Yup. Essentially breaking even on it. Um, we had agree that as we were moving out that as long as the property was, is not costing us anything extra we were good with, with keeping it as is. Um, and then because it’s no longer friends living there as we’re now looking for renters in the lower level, we were going to charge the higher rent amount that actually matches more of, of the general rent now that it’s fully out.

Andrew Kerr (32:39):
Yeah. Your friends were there, you’re helping them move into the city from the more rural area, get, get established and then they can find a place. Yeah, I mean, I think that’s really reasonable. It’s, as long as we’re breaking even and we’re helping our friends, it’s a win for everyone. And now you’re saying, okay, we’re bringing in strangers, real tenants, they’re paying market rent, you know, no longer, we’re not being nice to strangers. Makes perfect sense. So how’d you decide on what actually the market rent was?

Casey (33:06):
Um, so we started looking at all of the other rental options in the local area and pricing things out that way. Um, and in most instances, a one bedroom apartment is around a thousand dollars a month. Um, and since our location, the duplex is a two bedroom upstairs and a one bedroom downstairs. Since it is more, not necessarily a basement but a half underground, um, location, we decided to be a little bit more competitive and rent it out for 900.

Andrew Kerr (33:49):
Okay. No, I think that’s also reasonable where you’re saying, you know, you’re not getting the full giant windows that you would upstair level. You’re a little less, so you want to be competitive so you can get attendant in. So you’re renting that bottom for 900. What about the upstairs? How are you renting out that? The two bedroom one bath now. Upstairs.

Casey (34:10):
Yeah. So our friend is still living upstairs. Um, and as part of that she is helping us keep an eye on the entire place as a whole. Um, so she is actually renting her section out for 900 as well. Um, knowing that longterm and to be closer to market value and market rent, um, she’s saving about $300 a month, um, because we would look at charging somebody else about 12, $1,200.

Andrew Kerr (34:42):
Okay. So, but even right now though, you’re 1800 a month in your mortgage is the 1300. So now you’re actually making a profit and you’re still helping a friend out.

Casey (34:51):
Right? Yep, exactly.

Andrew Kerr (34:53):
So the utilities for the property, I want to touch on this again one more time. So now you’re fully out. Does it have two electric meters, two gas meters, two water meters, or is it all at one and you get the bill and then you divided up to the tenants? Like how are you doing that now that there’s actually fully separated?

Casey (35:12):
Yup. Um, so we did look into the cost of separation with the two different meters and things like that. Um, we have actually chosen to keep all of the utilities with us, um, because there are specific sections of the house that are still, that would qualify as electricity for both. Okay. So like the front, the front of the house has lights for in front of the garage and in front of the doorways. And so, um, after going through and doing a lot of research, the, those lights themselves, those outdoor lights are technically not one person’s or the others. And so that would have to be on a third meter.

Andrew Kerr (36:03):
Yeah. It’s, it’s common space. Yeah.

Casey (36:06):
Right. It’s common space. So it would need to be on a third meter that we would, as the landlords would need to pay for. Um, so with that and the heat itself, um, needing to be, since, what’s one furnace with dual zones? Um, we were going to have to cover gas on our, on our side. So we figured we’ll just include the electric versus coming up with a way to rewire everything to have three separate meters, um, in the house. So we cover, um, gas, utility or gas, electricity and water, and then the renters themselves cover trash and um, any internet or cable that they would choose.

Andrew Kerr (36:54):
Okay, great. And so, I mean you sort of went through this really cool process of you were renting a place, not by all the bars and restaurants originally, but in a more old folks apartment essentially. So you could get a more reasonable rent. You are 1100 and the moved up to 1200. You knew right away you wanted to buy a property that could be a longterm rental. You bought it, your mortgage is 1300 bucks, and then you start getting into roommates and now you dropped to about $400 a month for your housing costs. So you know, 1200 down to 400 you’re saving 800 bucks a month, you start using that to fix up the property and get it fully separated. And now it’s in a full rental property. You’re bringing in $1,800 a month in gross rents and still have, you have some utility costs you have to pay, but you’ve got your mortgage at 1300, so now you actually have profit from that that you can use to pay your existing mortgage on your new sort of, is this your dream home? Your, your place, you plan on living for quite a while? You mentioned like nine acres and it sounds like it’s a pretty cool place.

Casey (38:02):
Yeah. Um, so we plan to stay here for life. This is the intention is to have it be our dream home, but we’re still looking for other opportunities in the neighborhood to create other rental, other rental options, other Air bnb options or, or short, short term rental. Uh, but we plan to stay in our, in our current home right now for life.

Andrew Kerr (38:30):
Awesome. I mean, that’s really cool story. How this sort of four or five years the way it did, it sort of brought you from renting to homeowner to having decreased living costs, to now, you know, getting into your dream home and still having this nice cashflow rental property. So, you know, thinking back through that period of time, what do you feel your like biggest win was or your biggest success was with that house hacking experience?

Casey (38:57):
Um, overall I would say the biggest success was being able to find the place and get good one that actually met our criteria of being the single family home that technically was a multifamily that we could easily transform into a duplex. I would say it would be our biggest success with it.

Andrew Kerr (39:21):
And sort of thinking back through that same period of time, what do you think your biggest challenge was? Or did you have something if thinking back, if you could go back in time and change it or do it differently? You know, what that might be?

Casey (39:33):
Overall? I would say the, the biggest challenge was that we, we bit off more than we can chew on a lot of our home renovation projects. Um, we, we were pretty handy and my husband has now actually become a full entrepreneur and does woodworking as his main business. But going through and learning how to do everything, we, we ended up buying a used tile saw and redoing the tile flooring and learning how to do tile flooring and how to texture walls and put in cabinets and install everything. Um, was definitely a process that takes time. Um, a lot of people see the, the home renovation pro TV shows and things and you don’t realize that it could literally take you a year and a half to finish a kitchen remodel. So be prepared and the amount of dust that can be created and, and the challenging piece of just living in your renovation.

Andrew Kerr (40:50):
yeah. Living in the renovation, doing the renovation with your spouse. Yeah. Yeah.

Casey (40:55):
And still having full time jobs. It’s, it’s a lot.

Andrew Kerr (41:00):
So is that where you’d go back and hire that out then?

Casey (41:04):
Um, I would say for us personally, no we wouldn’t. Um, we really wanted to build out these skillsets, um, to do the work ourselves longterm. We had some minor experience with, with doing some of these things, um, growing up. But, um, knowing what I know now, there’s definitely things that I would suggest hiring out to make the process more, move the process along more quickly.

Andrew Kerr (41:35):
So w w what would those things be that you’d actually hire out?

Casey (41:40):
Um, so for example, we ended up hiring out, um, the install of the two front doors, the reframing of the two front doors and um, having somebody do the, um, drywall and mudding and taping and sanding. For those of you who have, have done drywall, mudding and taping, and the sanding piece is the worst part about any renovation. Um, and so that’s one thing that we would prefer to hire out versus doing ourselves. But it really depends on, on the space, the amount of time you have, what you’re willing to do versus what others are willing to charge. Um, and those kinds of things too.

Andrew Kerr (42:23):
Well, I’m right there with you. I love hanging drywall, but when it comes to the mudding and taping, I get so neurotic where it’s just, it doesn’t want to go on. Right. And then smooths out. And then once you get it on, then you can come back and like sand and sand and then just dust everywhere. Like Oh yeah, no, thank you. I hate that part of it.

Casey (42:42):
Yup. Yup. I’m the one that ends up sanding and then I think it’s good, and my husband looks at it and he’s like, no, you still got a little bit left. And I’m like, but I can’t tell the difference.

Andrew Kerr (42:56):
It was smart that you hired out the, uh, exterior doors. I mean, especially, you know, if you’re listening, that’s something where, you know, an interior door, it’s a little easier to have mistakes on. You want to make sure it’s plumbing nice and level, so the door opens and closes and latches. You need that same thing with the exterior door. But the exterior door, you want to make sure it’s done really right because it needs to be water tight. You know, you’re letting the elements in and out if it’s done wrong. Um, so, um, yeah. Th thanks for sharing those successes and challenges. I know you’re sort of in your dream house now, but, uh, Oh, sorry. Go ahead.

Casey (43:30):
The other thing too with the, the front doors is that, um, the importance of the seal is, and making it waterproof as you said, is extremely important. We actually had to have the, um, the company that put in our doors come back out because they made the seal too tight. The door was too hard to open. Um, so that’s definitely one of those things that I would recommend having professionals do because if it does become too tight, um, as the weather changes and things like that, they will come out and fix it.

Andrew Kerr (44:09):
Yeah. And what she’s referring to, houses tend to settle over time and especially as a seasons when it gets really cold, stuff can tracks and if it’s too tight and you install it in the summer and it’s too tight when the house starts to contract and settle, you can actually have some really big problems. And same thing if it’s, you know, to, to loosen the winter and then summer comes around and stuff expands, you know, you get these challenges that can, can really, um, come up. So yeah, thanks for mentioning that. So this sort of question here is, would you actually do another house hack?

Casey (44:42):
Oh yeah. Um, we definitely would. We’ve actually discussed, so the house that we bought for our dream home is intended to be our large family home. Um, so we have four bedrooms currently and we are expecting our first child. So we are still, we still have two rooms available.

Andrew Kerr (45:05):
Well congratulations on the upcoming child.

Casey (45:08):
Thanks. Um, so we are actually have discussed renting out one of the rooms for a short term period as well. Um, so still house hacking in our current house, um, to help continue to increase our, our, our speed at which we could get our next rental longterm. We want to do another duplex, maybe even a quadplex, but right now it’s the process of saving up the money to get there. So if you continue to house hack our own house to make it more quickly so we can move to move on to another rental.

Andrew Kerr (45:47):
Yeah. Bring in more income in your current house, add that to the rental income you’re getting on, on that original house so you can save up for that down payment quicker.

Casey (45:56):
Yeah, exactly.

Andrew Kerr (45:58):
Awesome. Well CJ, thank you so much for being on the show is such a cool story about, before we let you go, we like to ask all of our guests a set of final six questions that we like to call The famous six, so six questions, rapid fire succession. Are you ready for it?

Casey (46:16):
Yeah, let’s do this.

Andrew Kerr (46:17):
Awesome. What is your favorite personal finance blog book or podcasts that you’ve read or listened to recently?

Casey (46:26):
Um, so I would say overall Choose FI um, has been the podcast for me. I didn’t know what we were doing was building towards financial independence until, um, somebody actually brought it up that, Oh, you know, you’re, you’re trying this for financial independence. And I was like, what are you, what are you talking about? Um, and she actually directed me to the podcast and that was back in October of 2018 and I’m like, yes, this is exactly what we’re doing. Um, and I fell in love with, um, the podcast. It makes really easy steps to continue to improve your, uh, your financials and really build out what you want your life to be.

Andrew Kerr (47:09):
Yeah. Awesome. I love their podcast. All right. Number two, what is your favorite real estate related blog book or podcast?

Casey (47:18):
Um, so I really have a hard time reading any books. So I, I do a lot of podcasts listening. Um, Paula Pants Afford Anything podcast I feel is also a really good option. Um, she talks a lot about real estate investing and has a real real estate investing course, um, that it really takes it down into the nitty gritty details. Um, making it easy to move, move forward.

Andrew Kerr (47:48):
Cool. All right, number three. What’s been your favorite travel destination you’ve been to so far?

Casey (47:56):
Um, so this one’s a little bit tougher. Um, overall it’s stuck between Big Sky, Montana and Bend, Oregon. Um, we, we liked both places. And in Big Sky we rented out, uh, a VRB or a short term rental an Airbnb or whatever, whichever site people use, um, with 13 of our closest friends. And spent the week hiking, which was a huge blast. Um, and then Bend was just such a beautiful, nice place to be that I’m stuck between the two,

Andrew Kerr (48:42):
Both pretty awesome places. All right, so number four, what’s next on your travel or vacation list?

Casey (48:50):
Um, overall we are keeping him a little bit closer to home now or I shouldn’t say closer to home, but now that we are, we’ll have our, our child, um, we’re planning a family vacation to Vancouver, Washington next year. Um, we have some family out in Washington that we’ll visit with as well. So that’s kind of our next big trip.

Andrew Kerr (49:15):
Yeah. Very cool. And then a number five, what is the biggest bucket list item that you haven’t accomplished yet?

Casey (49:23):
Um, so that for us is to become FI. Um, so I can start dreaming and coming up with what it is that I want to do and not have to worry about, um, the income piece of it and the money and how we’re going to make that all work. Yeah. So that’s kind of the, the bucket list is to give me some space to breathe and figure out what it is that I want to dream on. As I mentioned early on, my husband is the dreamer and I’m the executer and he’s, he’s pushing me to come up with what my dreams are so we can execute on those backs.

Andrew Kerr (50:00):
Cool. That’s so awesome. So have you figured out a timeline of how far you are away from FI yet or are you still trying to figure out with and play with some of those calculators?

Casey (50:10):
Um, so as of right now, I believe we can do it, um, overall by the time that we are 40. Um, but it, that is kind of the safe zone with all of the unknowns of, of having our first child or not having it quite yet, but, um, we’re a month away, so it’s coming up fast and we’re not really sure what all of those expenses entail to, um, so I’m giving us 10 years to figure it out.

Andrew Kerr (50:42):
Yeah, I have a little buffer in there. Cause you know, children, they like to break things. They cost money, then he’d doctor’s visits. Yeah. That was, I think that’s smart to have that buffer in there. Awesome. And the sixth and final question, what is your favorite life hack?

Casey (50:57):
I don’t, I’ve heard a lot of different life hacks and I think the one that really hits home for me is don’t do what everybody else does just because that’s the norm. Do what is right for you. And if that’s house hacking and if you’re 30 years old, you’re not supposed to be living with other people or whatever, whatever that stereotype culture pieces out there, you don’t have to follow it. It’s not the end all be all and it can improve your life overall. I mean, we love living with roommates and even as we continued to age, it’s, it isn’t as big of a deal as I thought it was being a 21 year old, you know?

Andrew Kerr (51:47):
Yeah. I mean once you’re used to it, it just becomes a norm.

Casey (51:52):
Mhm yeah, exactly.

Andrew Kerr (51:54):
Awesome. Well CJ, thank you so much for being on the show and being so open and sharing your story and your house hacking journey. We really appreciate it and thank you again.

Casey (52:02):

Speaker 1 (52:07):
Thank you for listening to the house hacking podcast. For more up to date information on house hacking, to access links and resources mentioned in today’s show, and connect with the guest and host, head over to that’s – Where your house hacking journey begins.


Be sure to check out our Ultimate Guide to House Hacking for a great overview of the different styles of house hacking and different types of tenant bases.

Check out the home page for “The House Hacking Podcast” here.