Income Suite House Hacking with Bonnie Katz Sailors:
Bonus episode alert!
This week we’re going to the West Coast to hear how income suite style house hacking allowed the amazing Bonnie Katz Sailor to create a strong financial foundation while fighting cancer. She started as a business owner and decided to take out a loan to purchase a home in the Seattle area. Bonnie and her husband lived in the house while it was going through renovations, then decided to rent out the vacant garage. By renting out a part of her own house, she was able avoid paying as much mortgage – house hacking at its finest! With three properties now, Bonnie has been generating so much income that allowed her and her husband to take an RV across the country. Now she’s traveling debt and cancer free! Here’s Bonnie’s story:
You Can Listen On:
Books Mentioned in this Episode
Notable Mentions:
Cozy.co property management software – https://cozy.co/
BiggerPockets – https://www.biggerpockets.com/
Choose FI – https://www.choosefi.com/
RV Entrepreneur Podcast – https://heathandalyssa.com/rv-entrepreneur-podcast/
How to get in touch with today’s guest:
Bonnie Katz Sailors – https://travelingsailors.wordpress.com/
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):
All right, I’m really excited about today’s guest. Today we’ve got Bonnie coming on the show. Bonnie went from art school to successful entrepreneur and real estate investor. She also got into fitness and is owned her own personal training business for the past 20 years. She’s now moving on to her next adventure of living in an RV with her husband so they can travel across the U S and around the world. So Bonnie, thanks so much for coming on the show. How are you doing today?
Bonnie (00:57):
I’m doing really good. Thank you for having me. This is a real treat.
Andrew Kerr (01:01):
Wonderful. Where, where are you calling in from?
Bonnie (01:04):
Um, I’m here in calling in from North bend, Washington. I grew up in Seattle in the Seattle area and, uh, yeah, living in North Bend right now.
Andrew Kerr (01:13):
Oh my goodness. Yeah. So a couple of years back, I almost got recruited for a job in Bend, Oregon, and just the pictures of it. I mean, that’s what really drew me to it, where the job looked okay. But being there in bend with the scenery was just absolutely beautiful.
Bonnie (01:28):
Yup. Oh, just one note. So this is North bend, Washington.
Andrew Kerr (01:33):
Oh, di, different, different bend. Okay.
Bonnie (01:35):
No, I know it’s, it’s confusing, but, uh, yeah, North bend is, is sort of East, uh, about 45 minutes East of Seattle. And, uh, and we’ll get into the other story in Bend, Oregon. But,
Andrew Kerr (01:48):
ah, okay. Okay. So you’ve also been Bend, Oregon as well. All right.
Bonnie (01:52):
Yes, yes, yes.
Andrew Kerr (01:53):
All right, well let, let’s sort of dive in then. Can you just sort of give us a high level summary of this sort of house hacking real estate journey that, that you’ve been going on?
Bonnie (02:03):
Yeah. Um, well, it kind of started where we got lucky enough to buy our first home. Me and my husband, um, in, in the Seattle area in 2010. So we had a really good real estate start to our real estate career. We got a, um, FHA loan and we did a 203 K rehab on it. So we were able to take, uh, a house in and remodel it and live in it, um, for about eight years. And, uh, we own a business together. And, uh, we kind of thought we wanted to invest our money. I, you know, some of our profits from the business into real estate. So we kind of thought, Oh, we had a garage and we thought, Oh, maybe we’ll turn that garage into a rental. Um, but it wound up that we, uh, bought another house in Bend, Oregon and just made it an immediate rental and thought maybe we’re going to retire there one day.
Bonnie (03:02):
And, uh, so we do have a rental house in Bend, Oregon as well. And then, and we kinda like this, uh, being a landlord or, you know, having rental property, we get to being in the Northwest, you get to see the appreciation right now really well. So it was pretty motivating. And, uh, again, you know, investing early and get to see the returns, um, have been great. Uh, so far. So, and then, um, my husband has, uh, is in the military and we haven’t used our VA load, so we thought, Oh, let’s, let’s do this again. You know. So we went and we bought a house in the Tacoma, Washington area, um, about three years ago and we, it was the house that nobody wanted. There was another house, two doors down that everybody wanted. It was all, you know, done up nice inside. And the house that we purchased needed a lot of work. And, uh, so we bought that and we remodeled it and turned it into just a beautiful three bedroom, a house, on a third of an acre. There was a view of the Olympic mountains, sunset view. And, uh, we had a hot tub and had a beautiful kitchen and everything. So that’s where we came from. Uh, just recently. And then we, um, yeah, decided, okay, we’ll rent that place out to, we lived there for two years and we’re gonna, you know, live in our RV. Of all things
Andrew Kerr (04:34):
RV life. So quick, quick little note. I’ve actually been trying to convince my wife for us, like do a sabbatical in another year or two and let’s get an RV for a year and travel all across the U S we’ve traveled a lot internationally. You want to keep doing that. But I’ve been trying to convince her to do the RV life, uh, and she’s not having it right now, so,
Bonnie (04:54):
Oh yeah. Well it’s good to try it first and you know, see if you like it or not. For us, we bought an RV last year and we just did a few trips and we really, really enjoyed it. And, uh, we were really, I was a little nervous about living in it full time, but you know, everything is a trade off. Um, I mean like, yes, I miss my big beautiful kitchen right now, but you know, we’re here in this beautiful area and, uh, somebody else was paying all of our mortgages right now. So, uh, that’s, that’s definitely a plus. Yeah, it’s been, it’s been a really great experience. We get to downsize, um, you know, going through all of our stuff and getting rid of a lot of stuff has been really good. It feels really good to do that. And then kinda just seeing how we can live, how we can look like this.
Andrew Kerr (05:44):
Very cool. Thanks for that sort of summary of story. And I literally, as you were talking, I wrote down like a dozen different questions. I really want to sort of get into this with you. So back in 2010, when you bought that place, was this your first house? The two of you have ever sort of bought together first time as a homeowner?
Bonnie (06:01):
It was my first home, yes. And it was, my husband’s been married before, so it’s not, it wasn’t his first home, but it was our first together and uh, yeah, it’s uh, we fixed it up so nice and we just loved it. We love, we love it so much.
Andrew Kerr (06:14):
So, you know, back in 2010, were you planning on being real estate investors or was it an inkling of an idea out there? Or is this, you know, we’re doing the typical thing that everyone does. You go and you buy a house.
Bonnie (06:27):
Yeah, exactly. We went and we were going to buy a house. That’s what we wanted, a place to live together. And uh, we had no idea were going to be real estate investors, although the contractor that did our house became our friend. And uh, he was super inspirational. He had 13 rental properties and he kind of gave me a lot of advice. I’m in a networking group for my business, so I’m friends with a mortgage broker and a property manager. I sat next to him every week. And between the contractor and the mortgage broker and the property manager, I became really, you know, had a lot of support about becoming a landlord and doing rentals.
Andrew Kerr (07:04):
So what, what was that business networking group that you were a part of?
Bonnie (07:09):
Uh, to B and I, uh, B&I group business networking international, and I’m in the West Seattle chapter, so,
Andrew Kerr (07:15):
well that’s awesome. I mean, you basically, I think there’s no better way to look out if you’re trying to be part of real estate investor. Like, Oh, I’ve got all these people on my network. I never really thought about, I’ve been talking with and sharing meals with. And now like you literally had the Rolodex that every new real estate investor wished they had.
Bonnie (07:33):
Absolutely. I mean, the mortgage broker told me, he said, Hey, you can, why don’t you just buy a, you know, another house? And I thought, well, can I even do that? I didn’t even know that I could even do that. And he’s like, sure, why not? And he just, you know, he, he just said, why not do that? You know, you want to live in Bend one day, why not buy the house?
Andrew Kerr (07:51):
Yeah, that’s a really, really, uh, awesome that they were there to help sort of coach you through all of that. So, you know, you had mentioned you did this FHA 203K loan that not everyone knows about that. Can you explain just a little bit about that style alone and then why, why did you pick that type of loan?
Bonnie (08:09):
Yeah, that, that I knew something about some people having construction loans that they could roll into their mortgage. That’s basically how that works. You, um, you know, you bought, we bought a house that was under our limit and then the 203K is allows you to do construction and kind of fix up the home so that you can do all these upgrades and you know, maintenance that it needs and then roll it into the mortgage so it becomes part of your mortgage payment as opposed to shelling out, you know, 50 a hundred thousand dollars to redo a house is huge for us when it was our first home.
Andrew Kerr (08:47):
Yeah. So then you bought the house with the FHA, 203K loan, you know, with that loan, how much did you actually have to put for a down payment on the home?
Bonnie (08:57):
I think I put down about $25,000 total. Yup.
Andrew Kerr (09:02):
And do you remember, was that like roughly 5% 10% 20% of the purchase price?
Bonnie (09:07):
I think it was about 10%.
Andrew Kerr (09:10):
Okay. And, and was part of that for the normal down payment and a contribution towards the renovations or how was that all broken up? Do you remember?
Bonnie (09:21):
So I mean it’s all together. So you have one big mortgage and then I just put the money down on that and so it really just gets all rolled in together.
Andrew Kerr (09:29):
Awesome. So now you bought the property, you closed on it. Did you live in it while work was being done or get all the work done first and then move into it afterwards or, how did all that work out?
Bonnie (09:39):
yeah, so we, uh, had places to live, uh, so we didn’t have to live through the construction actually. So we had, um, places to live where we could move in afterwards. But that wasn’t really the case with our last home. So we have lived through construction before, but in that house we did not.
Andrew Kerr (09:58):
Great. And how long did you end up living in that house total?
Bonnie (10:02):
Uh, about eight years.
Andrew Kerr (10:03):
Okay. And it’s now a rental property
Bonnie (10:07):
And then now we rent it out. Yeah, it’s been great. We’ve been renting it for the past three years or so, or two and a half, three years. Yeah.
Andrew Kerr (10:14):
All right. So tell me a little bit, have you refinanced the property since then or do you still have that original FHA loan on the property?
Bonnie (10:21):
You know, about two years in, we did refinance it and we got a real low, we’re at 3.25% right now for our interest rate.
Andrew Kerr (10:30):
And did you do a 30 year loan or 15 year loan?
Bonnie (10:33):
We did 30 year loans. Yep.
Andrew Kerr (10:34):
And then that got rid of your mortgage insurance or was your loan devalue high enough where, where you could get rid of it or did you still have to have some mortgage insurance?
Bonnie (10:43):
We did not get rid of it.
Andrew Kerr (10:45):
Okay. And then did you see a drop in your payment though from the FHA loan to when you refinanced or was it sort of even,
Bonnie (10:52):
yeah, it was sort of even, um, it was a little bit lower, but we were able to take some money and you know how you skip the month of payments, you’re able to take that money and we put it towards our wedding actually. Yeah, we’re able to use it a little bit in that way.
Andrew Kerr (11:08):
Awesome. So do you remember roughly what your, your mortgage payment is running right now on that and does your mortgage payment include the taxes and insurance?
Bonnie (11:16):
Yeah. Um, so our mortgage payment on that is about $1,700 a month.
Andrew Kerr (11:22):
What are you actually getting in rent for that property now?
Bonnie (11:25):
So right now we’re getting about $2,000 a month and we’ve actually are keeping it like that every year because we absolutely love our renter and we want to keep her there as long as possible.
Andrew Kerr (11:40):
That’s one of the things I don’t think people realize is, you know, I think it’s good to try to do incremental increases in your rent, but if you’ve got a really good tenant and you lose them, you’ve got a month of vacancy while they move out, you clean it, fix up, find the new tenant, you know, and that costs you a couple thousand dollars. So you know, like in your case, if you were to even be vacant for one month, that’s $2,000 where to make that up, you know, you’d have to have a pretty big rent increase to to offset that over a longer period of time. So I love that. I do a lot of the same thing with my rentals, very nominal increases. Or if it’s a really great tenant, I really work with them because it’s, it’s cheaper to keep a good tenant than it is to go find someone else and do a higher rent increase.
Bonnie (12:22):
Yeah, absolutely. And I know this because we have our house, we rent our house in Bend, Oregon and we, we turn over that both tenants pretty quickly. And we do raise the rate, the rent every time we turn over the tenant. But uh, we’re having a harder time keeping them so we understand the value of keeping those, keeping the tenants.
Andrew Kerr (12:43):
So with that house there, you know, she’s renting it for 2000 a month. You’ve got a couple hundred dollars margin in there. Did you hire a property manager or are you managing the property yourself? How are you taking care of that?
Bonnie (12:56):
Right now I’m managing it myself. Uh, there really hasn’t been much to do. I just check in with her and you know, she takes care of it very well. So it really hasn’t been an issue. If we do leave on our trip, you know, I will consider property management at that point.
Andrew Kerr (13:11):
Okay. And how’d you actually find her in the first place?
Bonnie (13:14):
Oh, just an ad in the Craigslist, I think.
Andrew Kerr (13:18):
Okay. And then, you know, how do you actually collect the rent? Does she do it via PayPal or Venmo or do you use any sort of property management software?
Bonnie (13:26):
Yeah, we do. cozy.co yeah. And we make, we want them to set it up automatically so they just pay automatically and we just get it automatically. The only negative to that is there is a lag time between when you get the rent. Um, maybe about seven days or so. But again, it’s automatic. They don’t have to think about it. I don’t have to, you know, collect checks or anything like that.
Andrew Kerr (13:49):
Yeah, I use cozy myself and I’ll put it in the show notes for the listeners to go check it out. It’s a great property management tool. It’s free for us as landlords. And the only really downside as Bonnie mentioned is, you know, if a tenant pays on the first, it can usually take five to seven days to actually get the money deposit in your account because they have to draft it or the tenant’s account goes through the holding account and it takes a couple of days over. But you know, what I did is I collect the rent on the first, the money’s coming in, you know, around six, seven days later. And then I go ahead and pay the mortgage automatically on the 10th for the upcoming month. So, you know, I don’t actually mind those couple of days. And then they, I do know they have a, if you want the money quicker, they have an accelerated option where you could pay a couple bucks to get it quicker, uh, as well. Yeah. But overall I really love cozy. Lets you do the screening doesn’t really cost us anything.
Bonnie (14:41):
Yeah. Yeah, it’s been great.
Andrew Kerr (14:42):
So that sort of wraps up that property. It’s moving along. It’s cashflowing great. You’ve got a wonderful tenant in there, you’re using cozy, you bought this shore rental property in bend, Oregon. You had some extra money from your business, you wanted to find a way to invest it. So why’d you pick investing in a rental property versus putting in like a Vanguard account or fidelity or you know, normal stock market account or even just in a savings account?
Bonnie (15:07):
That’s a great question. Um, you know, I tried to do that and I never really felt connected to those investments. And I remember talking to one of our clients and they said, Hey, you know, maybe you should consider investing in things that you feel passionate about, that you’re feeling connected to. And we really love Bend. And again, we wanted to maybe retire there one day. So that just made sense to us. And I understood like to me property is something you could improve and it’s something physical and it’s something you have a little more control over then, you know, when I put my money in the Vanguard account, I don’t know. So there’s just a disconnect for me there. Um, that I didn’t find in property. And uh, we love fixing up houses too, so, so that just made a lot of sense to us. And then we get to go down to bend, Oregon on business.
Andrew Kerr (16:02):
It’s a business ride off. I’m visiting my rental property
Bonnie (16:05):
And, you know, be able to write it off a lot of it. So that’s been so wonderful. Um, such a wonderful park and that I don’t regret that at all.
Andrew Kerr (16:17):
Well, let’s, let’s touch on that just really quickly. Do you remember roughly what you bought it for? What type of loan did you do? Like down payment and what’s your payment running on that right now?
Bonnie (16:27):
Yeah, so we bought it, um, 2015 for $232,000. We rolled in a new roof onto the, into the property. So that’s was really helpful. And then we put 20% down our payments, about $1,200 a month.
Andrew Kerr (16:47):
Does that 1200 included the taxes and insurance on the property or do you pay that separately?
Bonnie (16:52):
Yup. And our tenant now is paying about 1650.
Andrew Kerr (16:57):
Oh, so you got some, some good margin in there.
Bonnie (17:00):
It took a couple of years to build that up. But yeah, uh, immediately we did have a little bit of money. The difference in that property. We do have a property management company, uh, running it for us, which is great cause we don’t want to go down to bend every time, although it’d be nice. But um, so they take care of that for us. And so I, you know, their fees are getting paid for, uh, in that property. It was, it wasn’t a house that we had to fix up. It was all ready to go. It was pretty fixed up already when we bought it. So that’s also really nice. Kind of a turnkey rental.
Andrew Kerr (17:32):
Yeah, that makes it really easy to get in, especially when you’re investing at a state. So how’d you decide on the property manager? Did you just find the first property manager? How’d you find them? Did you vet them and talk a little bit about the fees that they charge?
Bonnie (17:45):
Yeah, so they charge 8 percent there. Um, I just kind of look them up online. I talked to them and I met with them in person and I really liked the person that I met with. And so I just said, okay, well I’m just going to try him and see how this goes. And they were great and they still have been great after, you know, three years, uh, three, four years. And so I just have kept them. I haven’t used any other ones. I’ve heard horror stories about property managers, but I don’t feel like I, I feel like this one is, is a good one.
Andrew Kerr (18:18):
Well I think you did it the right way. Especially if you have the ability to go meet with someone. It’s one thing talking with someone on the phone, but going and like sitting down with them, see how they present themselves. Can you actually get along with them? What’s their office like? So you definitely did a really good step there. So they’re taking 8% of the, the rent that’s collected.
Bonnie (18:36):
Yeah.
Andrew Kerr (18:36):
Okay. So yeah, it looks like you’re still making a little bit of money on your first property. You bought this investment property, you’ve got some decent cashflow on it. So let’s move on to the third property that you bought. This one I’m really, really interested about. Tell me, why did you decide to buy this property? What were you and your husband thinking?
Bonnie (18:55):
Yeah, what were we thinking? Um, well we decided we want another rental property because again, like each one of these houses is like a little business. And for us, you know, again, we got to see the appreciation grow, we got to see somebody else pay down our loan and we get the tax benefits as well so and, and a little bit of cashflow. And so we thought, Hey let’s do this again. And then I, it just dawned on me that my husband had not used his VA loan and that we should do that. And so there was a little bit of, we had to prove his VA status and that he didn’t already have a house. There was a lot of hoops we had to jump to get his, get this VA loan but then we got it. So you don’t really have to put any, not too much money down there is a VA fee, but there’s a lot of benefits to the VA loan. So even though we had money to put down on a house, we were able to get into the house pretty quickly and easily and use the money that we had for the remodel cause you weren’t able to roll in a remodel on a VA loan. So we just had to pay out of pocket for that.
Andrew Kerr (20:03):
Yeah, very smart. I’m actually working on, my wife and I are working on our fourth house hack right now. We actually did an FHA loan because there was the low down payment that three and a half percent because we wanted to use all of our cash to actually renovate the property. So we do the same thing of like, you know, why put 20 or 25% down if you can do a little bit of down payment. Now you’ve got all this cash that you can use to renovate it. All right, so you bought the property with the VA loan. What year was this?
Bonnie (20:30):
This was about two years ago. So 2017 June I think, or no, I’m sorry, April to March or April, 2017
Andrew Kerr (20:40):
in what city was this in?
Bonnie (20:42):
So this is an Edgewood, Washington, which is a suburb of Tacoma, which is a suburb of Seattle, Washington.
Andrew Kerr (20:50):
Awesome. And do you remember roughly what you bought the property for?
Bonnie (20:54):
So we bought the property for $330,000 and then we put about $50,000 in, in, um, rehab costs.
Andrew Kerr (21:05):
Yup. Well, one of the, I liked the fact that you use the VA loan with the low down payment because one of the things you hear quite a bit is in, it’s really hard to invest in real estate and buy real estate if you’re in a high cost of living area like California, the Pacific Northwest, New York. And clearly you guys have made it work three separate times. So that, that’s really awesome. So you,
Bonnie (21:26):
and so, yeah, I mean, the Seattle area is, is, is so outrageous as far as trying to buy a property, but we were able, again, our first one was in 2010 so it was inexpensive. You know, this one was pretty, you know, about 45 minutes South of Seattle, so you could still get a good deal down there and then Bend, Oregon was still a good deal at the time as well. Uh, so we were able to get in at these opportune times.
Andrew Kerr (21:52):
So let’s dig in a little bit about that 50,000 you did what, what were the type of renovations in? Did you actually move in the house? It is what it sounded like and did the renovations while you were living there?
Bonnie (22:03):
Yeah. Um, we did the renovations while we were living there and it was fine because the house was, you know, not an old, not that old, those 1972, uh, though it was pretty and there were some renovations in there already, but not really to our liking. So we redid our kitchen. We, it was a tiny, tiny little kitchen and we expanded it out. We knocked down a a couple of walls to open up and have a open concept in there. Uh, there was carpeting in there and we redid the, all the hardwood floors put in hardwood and then we painted everything. We did a little bit of renovation in the bathroom, but really not that much. Right. You know, change all the fixtures. We did some out outdoor work where we put in a shed and yeah, I mean, and then that was about it. It was all cosmetic. We did insulate the house and the bottom and the, and the roof. So that was helpful. Uh, the kitchen was really the big, the big, uh, expense there.
Andrew Kerr (23:07):
Great. Thanks. Thanks for sharing. And now we know you’ve, you’ve since moved out of it, so you lived there about two years, is that right?
Bonnie (23:14):
Yeah, two years. Exactly.
Andrew Kerr (23:16):
And then roughly what’s your mortgage payment on it? And then did you use a property manager for this, this or are you managing it yourself?
Bonnie (23:25):
Yeah, so I, our payment is 1995 and our, we’re collecting $2,300 in rent from our renters. And I am currently managing it, um, myself. And again, if we move or I’m sorry if we travel or go out of town, you know, would, I’m gonna, you know, talk to each of the tenants and see how comfortable if they, most of the tenants probably don’t want a property manager and I feel like to go through a second, a third party to get things done. So I’m, I’m going to talk to them and see like if they feel comfortable not having property manager, even if we’re out of town and being able to kind of, you know, go get a plumber if we need a plumber, etcetera. So
Andrew Kerr (24:12):
well one thing maybe to think about is actually not even mentioned to your tenants that you’re going to be out of town traveling. So even when I was self managing, I traveled quite a bit for work and for sort of personal fund and I could be talking to my tenants on the other side of the world, like a specific, remember one time I was in Haiti doing aid work on a phone call with one of my tenants and they had no idea that I was in a completely different country and they had the request and I said, okay, great. You know, I’ll get someone to come out. I had the relationships with the local contractors and maintenance folks and I was like, great, I’ll put in the request email, the maintenance guy, the maintenance guy called said, Hey, I can come out, you know, Wednesday or Thursday. What time works for you? The tenant met them, they did it. Maintenance guy sent me the bill, paid it online with their credit card. No one was the wiser that I was in another part of part of the world versus where I always had this fear of if the tenants knew I was gone, they would act up. Be like, Oh well I cannot pay rent and he’s not gonna worry about it. Um, because he has, you know, hours and hours away.
Bonnie (25:10):
Yeah. Yeah. That’s, that’s a good thought. I know for us, we like to be in pretty remote areas. Like when we go into the mountains and things, there’s no wifi, or cell or anything. So we might be gone in that way. Not available. That would be my only worry. Yeah. But, but it’s true. Like if I’m available, that’s not a problem.
Andrew Kerr (25:33):
Awesome. So you’ve got these three rental properties that you bought. One was a true rental, the other two you lived in, you sort of did, lived in renovations with a third one. They’re all bringing you in a little bit of cash flow. So how is that sort of effecting your life now? So you’re obviously making money from these three properties. What’s your living situation like and what are you doing with the money that you’re making from these three properties?
Bonnie (25:56):
So we decided that we were going to try to live in our RV. Well it’s a travel trailer, it’s a 22 foot travel trailer and we were going to move to our, in my inlaws property they have like over an acre of land in North Bend Washington, which is where we are now. And they said they’d be happy to let us park there and plug in and whatever we need we could um, you know, be there. We’ve got a really lucky situation with that. So that’s where we are right now. We are making a little bit of money from the rentals. We are saving money cause we’re not paying a mortgage, a $2,000 mortgage. And so that’s about $2,400 a month we’re saving each month. And you ironically, once we moved here, we moved here in June this year in 2019 and I, and you know, about two weeks after we moved here, I got diagnosed with breast cancer. So yeah, this was my second time too. I had it 10 years ago as well. So, so it was actually very timely for us. Um, I was able to get a lot of help with the dog that we have cause my in-laws just love our dog. So she got to go over there and play every day, uh, across the yard and play every day. And you know, I could go to all my appointments and things that I needed to go to and, um, and so I am able to pay, you know, have that savings and be able to pay my medical bills without a lot of worry. Um, so that’s been really, really helpful, um, to be in that position. And I, I find that that for me in particular, like that is a huge deal for me to be able to, you know, I have that, have that money or have that, you know, peace of mind to be able to take care of myself if I need to or if something happens.
Andrew Kerr (27:51):
Yeah. Well, how are you doing now? Health wise?
Bonnie (27:55):
I’m doing good. I have full recovery. I mean, both times I had cancer with stage one cancer, which is, you know, full recovery and you know, it’s just, you know, they watched me like a Hawk, every year, so this is how they found the second one. And uh, and uh, you know, it’s probably in my genetics somewhere and that, and it’s just sort of, yeah. Something I have to deal with going forward. Uh, which makes me very, I have very, I pay a lot in out-of-pocket health insurance. Yeah. Uh, so I, you know, so that’s a priority for me. Um, you know, my insurance is about $700 a month. But you know, in cases like this, when I actually get diagnosed with something, it really, really comes in handy.
Andrew Kerr (28:40):
Yeah. I mean, talk about just being lucky in the sense that you had all these three real estate things set up and you were getting ready to move in this travel trailer and you’re fortunate where you can be by family, still be in separate spaces and now you don’t have the two grand housing costs anymore. That’s money that’s there to help with your healthcare and your getting your RV costs covered by the rental income from the other properties. Like, I mean, ah, I’m, I’m, I’m just, I’m speechless. Am, I’m sorry you’re going through that. I’m glad you’re on a full recovery track. That’s um, man.
Bonnie (29:15):
Yeah, it’s uh, you know, and that’s the real deal. I mean, that’s, I’m, I’m only a 48 years old, so it can happen to people, you know, young, younger, my first time was 37, so like this kind of stuff can happen to young people too. It’s not just, you know, something to think about later down the road. Um,
Andrew Kerr (29:33):
so what’s your, your recovery schedule will look like, and obviously I know sort of before we did the interview, you had some notes that you guys are looking at traveling. So is that still on track or is your, your sort of short term focus and folks that are listening in? You know, we’re recording this right here at the beginning of November.
Bonnie (29:53):
Yeah. Um, so I am making a full recovery. I’ve done with my treatment and they just want me to do some followup medication, um, uh, for prevention. So, uh, I’m technically all done basically. And except for all my followup appointments and yeah, we’re on track. We’re in the process of selling our business, uh, 13 years. It’s a brick and mortar business, um, personal training studio. And we are going to hit the road, uh, in the RV and we’re aiming for January 2020. And uh, that’s, yeah, they were really excited. I mean, that’s, that’s the carrot dangling at the end. You know, we love hanging out, we love hanging out in the inlaws driveway, but really we want to be on the road.
Andrew Kerr (30:43):
Yeah. So you’re, you’re using your three rental properties now to sort of cover your costs for your RV travel trailer and then once you guys start traveling in January, will you be working remotely? Are you just taking time off or are you guys at a point where you’ve built up enough retirement where you can stop working? Just tell me a little bit about that.
Bonnie (31:06):
Yeah, so I, we really wanted to take, if possible, a year off and just not worry about working or just, you know, if opportunities come up we can take it. But really we’re not gonna worry. We have money enough to be able to travel for a year. I’m a photographer too. So for me, taking pictures, uh, landscape photography, landscape photography is just my passion now. So getting out there, taking photos. I mean, that’s, I just want to have fun like that. We love to hike and bike. Um, my husband has been working in the business, uh, all this time, so he’s really ready for a break and just to, you know, have some downtime. Uh, we will have to reinvent ourselves, uh, so to speak. Uh, probably change our careers and, and uh, do something totally different, but we’re kind of excited to see what that might be as well.
Andrew Kerr (31:59):
Well, you’re in this really fortunate spot where you’ve got these three rental properties, so now over this next year, you really don’t have to, I mean, do you have a, I guess not mortgage payment, but payment for the travel trailer?
Bonnie (32:13):
The payment is $280 a month.
Andrew Kerr (32:15):
Oh, so pretty cheap. And you’re, you’re making that on your, your rentals.
Bonnie (32:18):
Oh, yeah. That’s nothing. Um, yeah, it’s, that’s, that’s nuts thing for us. But yeah, we’re so really, we, I have money saved, uh, just from over the years. And I also, we’re getting, um, we’re selling our business, so we’re gonna have money from our, um, the sale of our business, um, which we can use to, to live for a while.
Andrew Kerr (32:40):
So have you read any of the blogs about couples that are traveling or families that are doing this sort of RV life for any period of time? Have you dove into that world at all?
Bonnie (32:48):
Oh, of course. Yes. Oh yes, I’m on all, I listened to all the podcasts and all everything uh, RV entrepreneurs big, I’ve listened to all of that. Um, just yeah, any and also a lot of the, the FIRE, you know, I listened to the fire podcasts and they all kind of talk about, you know, our view life is sort of an extension of, of this at times for people.
Andrew Kerr (33:13):
Yeah. So are you thinking of documenting your travel style? I mean obviously you’re a photographer so I feel like this almost goes hand in hand where you love taking photos. That’s your world and you’re gonna be traveling. I’m, I’m hoping you’re going to create a website or you’re going to do something to document this cause I for one would love to follow along.
Bonnie (33:29):
Yes, yes, definitely. We are working on that. It’s a travelingsailors.com and um, we are, I’m going to be posting my photos on Instagram and on the blog and I want to write, I do want to write about our travels. I know I’m a better photographer than I am writer, but uh, so hopefully the pictures will speak for themselves more so. But yeah, I’m super excited to to put that together and share experience.
Andrew Kerr (33:55):
Yeah, that’s very exciting. And I’ll be sure to put the links to your website and Instagram, social media all in the show notes for everyone. But yeah, I’m definitely going to check, check that out once you start traveling. So yeah, I mean I almost don’t know what to say. Like you’ve got this really awesome story. I mean over this past sort of since 2010 when you bought your first property, you know, you’re entrepreneurs run your own business, your first house together, you did this 203K loan instead of just buying the typical cookie cutter house that’s ready to move in, you bought a house that needed a little bit of work to make it your own. You were passionate about real estate, so you decided to invest money there. Then you did a VA loan in this sort of live in renovation. Now you’ve got three rental properties to sort of cover your costs for your travel trailer over the next year. When you take the sabbatical. I mean, you’ve had ups and downs along the way. I mean, it’s just a amazing story. I’m glad you were willing to share it with us.
Bonnie (34:55):
Oh, thank you. Yeah, it’s uh, it’s, it’s been, it has been a journey and a creative journey as well. Um, you know, we kind of feel like we weren’t really able to follow the regular 9 to 5, you know, 401k, you know, path. Uh, so we really had to make our own way and that’s really, you know, how we, we didn’t really set out to do all of this. We just really felt like we were behind and we had to catch up and we had to do it very creatively and take, takes, take some risks, be willing to move, um, be willing to live in the RV. I think that’s really, you know, not a lot of people are willing to do those things. So
Andrew Kerr (35:35):
yeah. Well it sounds like it’s definitely working out for you. So sort of thinking back through your whole house hacking real estate experience, what do you feel like your major success was over the past nine or so years?
Bonnie (35:50):
I think just being able to have the confidence to, to do these things, you know, to buy another home. I mean, people thought it was just crazy. Like, what are you doing? Uh, you know, people who have been seeing the housing crisis, you know, in 2000, uh, 2008, 2007, 2008 and, you know, just really worried for me, I think people were kind of afraid of what we were doing. And I think just having the competence to be able to do it and just felt right to us and being able to, you know, again, move, like not everybody’s willing to move out of their house, uh, every couple of years or, you know, you know, or even living in an RV to be able to save money. So I think that just, that’s been a great, uh, lesson for us and a lesson for me. Uh, what I’m able to do, you know, as far as I’m able to do these things and I’m, I’m okay.
Andrew Kerr (36:44):
Yeah. So again, thinking back through those nine years, if you could go back and change something, what would you change?
Bonnie (36:51):
Maybe buy more properties sooner. We bought our first property in 2010 and then the next one was in 2015. So maybe in between then, uh, cause again, that has appreciated a lot since then. But yeah, I’m happy with what we’ve done.
Andrew Kerr (37:12):
Awesome. And then sort of third question, wrap up the, this, this portion. Would you actually go back and do it all over again?
Bonnie (37:20):
Yeah, yeah, I would. Absolutely.
Andrew Kerr (37:23):
Awesome. Well Bonnie, thank you so much for being on and sharing your story. I really, really appreciate it. But before you go, we like to ask all of our guests a set of final six questions sort of in rapid fire succession and we call this section. You ready for them?
Bonnie (37:43):
Yeah, definitely.
Andrew Kerr (37:44):
Awesome. So number one, what is your favorite personal finance blog or book that you’ve read recently?
Bonnie (37:51):
Uh, well I’m more of a podcast listener than a blog reader or a book reader. So I will share my, I love the bigger pockets, money, podcasts, ChooseFI podcasts. Those are my go-to personal finance, um, um, podcasts.
Andrew Kerr (38:09):
Great. And then the second question is what is your favorite real estate related blog book or podcast? And then maybe I’ll, I’ll, I’ll modify this slightly for you if you don’t have a real estate related one top of mind. What’s been your favorite RV related podcast or blog?
Bonnie (38:26):
Uh, yeah, I actually do bigger pockets to start, has been instrumental in helping us with our rentals as well. So I would say bigger for real estate RV entrepreneur for, uh, for the RV podcasts. Um, so helpful. Both of them.
Andrew Kerr (38:43):
Yeah, I think bigger pockets is just the common answer that every single guest has been given so far. And it’s where I learned so much as well. So yeah, they have an amazing site. All right. Number three, what’s been your favorite travel destination so far?
Bonnie (38:55):
I thought about this. I, I have to say it was a trip to the Grand Canyon and we hiked down and did the lower Canyon rafting trip. It was a two week trip and it was unbelievable.
Andrew Kerr (39:08):
Oh, that sounds awesome. All right.
Bonnie (39:10):
Hard to top that.
Andrew Kerr (39:10):
Yeah, yeah, yeah. All right. So next question up is what’s next on your travel vacation list? And I want to modify this just slightly because you’re about to get in an RV and travel all over the US so like what’s one of the first places you want to get to or what’s sort of the top of the list for this coming year?
Bonnie (39:30):
Uh, so if we leave in January, we’re going to head South, um, and we’ll probably go through Arizona, Utah, Utah, Arizona, head on to New Mexico. You know, we want to hit the national parks that we haven’t been to yet and then maybe drive back up the California coast. So that’s kind of our, our journey so far.
Andrew Kerr (39:53):
That sounds like it’s going to be a lot of fun. All right, so number five, what is the biggest bucket list item that you haven’t accomplished yet?
Bonnie (40:02):
That I have not accomplished yet. Uh, I think, um, being financially independent, you know, I’ve, I’ve created passive income with my business and I guess that’s technically being, uh, financially independent while I have my business, but now I’m selling it. So, uh, but being ultimate, uh, uh, ultimately financially independent, uh, I think that’s, that’s my big bucket list at the end of the day.
Andrew Kerr (40:27):
Yeah, that’s a pretty solid bucket list item for a lot of folks. All right. And then number six, final question is what is your favorite life hack?
Bonnie (40:35):
Uh, I think my favorite life hack is, uh, owning my business and being an owner who is not really, well, I don’t have to work in my business. I work on my business. And to me, creating that passive income is just the hugest life hack that I learned long ago, uh, to get that passive income. And I’m getting that from the rentals as well. To me, that just changed my life ultimately.
Andrew Kerr (41:01):
All right, great. Yeah. Build that passive income. Really good life facts. So Bonnie, again, I can’t thank you enough for being on the show. Thank you so much for sharing your story. It was lovely having you on.
Bonnie (41:12):
Oh, thank you. This was great. I appreciate it
Andrew Kerr (41:16):
And be sure to follow back up with us once you’re traveling. That way we can check in with you to see how all your travels in the RV life is going for you.
Bonnie (41:25):
Yes, I will for sure.
Outro (41:29):
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 www.fibyrei.com that’s www.fibyrei.com where you are house hacking journey begins.
More Income Suite Style House Hacks:
Income Suite House Hacking with Jennifer – https://fibyrei.com/income-suite-house-hacking-with-jennifer/
Income Suite House Hacking in the Twin Cities – https://fibyrei.com/income-suite-house-hacking-in-the-twin-cities/
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.
