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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson speaks with Danielle Anderson, a mortgage lender and house hacker based in Denver, Colorado. They discuss the concept of house hacking, its benefits for first-time home buyers, and how it can serve as a stepping stone into real estate investing. Danielle shares her journey from working in food sales to becoming a lender, emphasizing the importance of education and preparation for aspiring investors. The conversation includes real-life examples of how house hacking can make home ownership more affordable and accessible, as well as the various strategies and resources available to help individuals get started in real estate.
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Investor Fuel Show Transcript:
Danielle Anderson (00:00)
Well, I think what I love about all of these strategies, literally they can start with 3 % down if you haven’t owned a home before. So the barrier to entry is less than what people think. And then on top of that, so I work in eight different states, Colorado, Tennessee, Alabama, Texas, Arizona, Ohio, Florida. But my team works in every state except for New York.Every single state that we operate, which is 49, has down payment assistance programs. So not only can you, if you just did a regular conventional loan, you could do 3%, or if you have to go FHA, you could do 3.5%. You pair that with down payment assistance, and you literally can get into a home in most states,
Micah Johnson (02:13)
Hello everyone. Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m speaking with Danielle who’s been making some serious moves in real estate now since 2016.Danielle, welcome in. Glad to have you.
Danielle Anderson (02:25)
Nice to be here, thanks so much.Micah Johnson (02:27)
Absolutely, I’m excited for our talk today. We’re digging in on a subject I haven’t talked much about yet and I think it’s one of the best ways to get started in real estate investing and that’s where a lot of people get stuck. It’s just getting started. So let’s dive in on that. For those who are out there who may not know you yet, what’s your main focus right now and what markets do you operate in?Danielle Anderson (02:51)
Absolutely, so I am based in Denver, Colorado. I am a mortgage lender and a house hacker, and I help first time homeowners buy their first house and make money off of it so that they can scale and rinse and repeat. So really just helping investors or everyday average people feel like they can.make money through real estate starting with their primary residence home. So I’m passionate about it. I bought my first house at 24 and it’s been life changing. And it’s helped me scale. I have three units right now that I rent out mostly short term and I guess I am a midterm investor or mid investor where I have short term rentals and then change that into like six months long term rentals off the when it’s not peak ski season. But I just love
I think that buying your first primary residence is really life changing and helps you get into the game to make money off of real estate and sets you up for the future. So I’m so passionate about helping people just start getting into the game.
Micah Johnson (03:46)
I love it, I love it. One thing I love about real estate people is we’re all tweaked and we’re all really, we get really pumped about it and I just, love it when I talk to folks who are into it because it is an incredible industry to do exactly what you’re talking about. You can change your life forever using real estate. So for those of you that are out there that don’t know what house hacking is, you said that term, give us a definition, take us into, unpack that term for us, what’s it mean?Danielle Anderson (04:12)
Yeah, my definition of house hacking is any money that or any home that you live in that you make money off of and that can be defined in avariety of different ways. like for me, my story started when I bought my first house, it a three bedroom, had two long-term roommates and I lived in the other. So that would be like a long-term rental house hacking strategy. Then when I moved to Denver, Airbnb became a thing and I bought a single family house and divided it into two and something that I call a sneaky duplex where I took a single family house and made it two living areas. And I had Airbnb guests come around through the backyard and through their own door. There was a completely separate space from my
and it was short-term stays. I loved that as in my beginning 30s because if I needed an extra bedroom for my parents, I could block off my calendar, I could rent it out when I wanted to, but it provided more flexibility than living with roommates in your 30s.
The other thing that I love about short-term rental is you don’t need a full kitchen. So it’s actually illegal, mostly in Denver, to have a kitchen downstairs and upstairs if you renovate because of the licensing laws and fire barriers. Most kitchens that are installed in the basement aren’t legal. So you don’t need that if you’re short-term renting because they’re only there for a day or two.
And then house hacking might look like you don’t rent your primary house at all, but every year or two you move and you buy a new house at 5 % down. So it’s less cash out of pocket to start investing. ⁓ House hacking might look like buying your kid a primary residence home as an investment for him while he’s in college and he has the roommates. ⁓ House hacking might look like buying your aging parent a duplex so that you are taking care of where…
where they’re living, but then you might have some cashflow in the second, third or fourth unit, all with putting 5 % down instead of 15 % down. And I think that’s the opportunity. And why I’m so passionate about it is it helps new investors get into the game and they don’t need a ton out of pocket to start.
Micah Johnson (07:04)
And so besides house hacking, that’s a great definition. I, I love how you incorporated a lot of them. That term gets tossed around a bit in the industry, but it’s a bit, it’s an umbrella term. There’s a few ways to do that. So besides house hacking yourself, you’re in lending, correct? That’s the path. What about that led you there? Like how did those mix for you in life?Danielle Anderson (07:21)
Yes.Yeah, so I actually got into lending from starting house hacking and I was helping friends and family open up their Airbnb’s and buy properties and help them run numbers on them. And I was selling bacon at the time working for Hormel Foods and it was fine, but I just couldn’t see my 20 years from now.
sling and bacon. And so I just was so passionate about that. And so that’s how I got into lending, where I could really merge my passion of making money from homes to helping others make money from homes. And I started really with the second home. And that was my primary base of helping people make money off of mountain towns with short term rentals. But as affordability became a big concern on just buying a house in general, I shifted to really
my bread and butter and where I focus most is on first-time home buyers. How do they get into the game of owning real estate? And it’s just been a passion of mine to help run numbers, but also help show them how you can make money off of it so that you can live in a house and not be house poor.
Micah Johnson (08:31)
So take us through that. Give us an example of one of the first time home buyers you’ve worked with. Because again, like affordability is an issue. you’ve got to take a significant jump in that monthly amount you got to pay, what are some ways that you’re helping them? Give us some examples.Danielle Anderson (08:46)
Yep, so one example is a single mom. Single mom, kids. Made about $150,000 or so. So making pretty good decent income. She was renting at about $2,000, $2,200 a month. In the Denver market, prices are pretty expensive. So her…average mortgage payment was about $3,700. Right? like going from $2,200 to $3,700 as a single mom, just was like, oh my God, I don’t think I can do it. But what we ended up finding, and I work with brokerages and agents that specialize in this too. So it’s me from the lending side, as well as agents on the ground actually showing properties where we found her a split level. So she has a walkout basement, the Airbnb guests come in through the back.
side. She lives upstairs, completely different floor. Her kids are safe. They’ve got a locked door between the upstairs and the downstairs. She on average makes about $2,800 from her basement. Right? So now her I can’t remember $37, $3800 monthly payment $2,800 is coming from the basement on average if we average 12 months. So she’s now living less than what she was in renting with a home that she owns.
And that is just like, there’s so many examples like that, especially like you can do a one bedroom or a two bedroom. She has a two bedroom. So she’s making a little bit more off of her two bedroom than you would off of a single unit basement. But I would say all around the Denver market or, and I don’t know multiple markets, but, $1,500 off of basement on an Airbnb is definitely, the average on the low end side. Yep.
Micah Johnson (11:03)
Someone has that investment mindset and they’re looking to go find one of these properties. What are some things they need to account beforehand before starting to dig in more, going and seeing things, talking to you for lending? What’s that pre-phase for them?Danielle Anderson (11:22)
Yep, I think the first thing is what do I want to do? Right? Do like if you’re Airbnb in it, you’re way more hands on than if you just have a roommate. Right? Startup costs are going to be higher if you have an Airbnb because it really needs to look like a Marriott. It’s got to be white sheets, pretty, pristine, ⁓ remodeled. Now, if you don’t have it remodeled, that’s still OK. Like I started with iPhone photos and hand me down Goodwill furniture and then Iyou know create as money came in then I fix it up but your price per night is going to be reflected on how quality of the space you know like how good the space is and then same thing with that you’re going to attract a different type of clientele depending on how nice your property is ⁓ so I think first identify what type of house hacker do I want to be am I okay with a long-term roommate for 12 months or six months or even a month a month ⁓ or am I okay with turnover
What I love about house hacking is it can ebb and flow over time? So if you use all of your money to buy that house And you don’t have a lot to get it set up you might start with just renting out the two extra bedrooms at 900 bucks a pop to help cover some of your expenses then switch and you know go Airbnb you might start Airbnb and then realize my god I’m not cut out for this like I hate having strangers in my home every night because I do have to be quiet or I hear them ⁓
One of the reasons that I didn’t have a microwave in my basement is I didn’t want them down there. Right? Go, you’re here vacationing. Go to uncle down the street to have dinner. I don’t want to smell it or do dishes. ⁓ So ⁓ it can change over, over. So I say start there. Then as you’re getting into, all right, I’ve identified that I want to Airbnb now.
Micah Johnson (12:55)
ThanksDanielle Anderson (13:05)
regulation, can I do what I want to do? What are the permitting regulations? ⁓ What type of property do I need to look for? Maybe having my agent set up a walkout basement, right? That would be a great Airbnb type. Something that has a separate entrance. Are there keywords like an accessory dwelling unit that then highlights this is the type of rentable property I want? If you’re a co-living and co-living is something we haven’t talked about, co-living is essentially a room by room rental house hack where you might have a different lease for each bedroom.You might look at three bedrooms with square feet that could maybe support five or six bedrooms. So you’re spending a little bit of initial upfront investment that you’re then getting a contractor, dividing out more rooms. So then it’s a more profitable investment just because you’re creating. So you, that search might look like, I just need to look at square footage. You three bedrooms that are 3,500 square feet might be a great.
Like, holy, you’re like, I can make more bedrooms out of this house.
Micah Johnson (14:07)
Right. Interesting. I love how creative it is. Another thing I love about real estate is, if you’re willing to think outside the box, there’s almost anything you can pull off. And it’s just, what’s your appetite? I love the fact that you said, what are you doing it for first? Cause that’s definitely important. Understanding what’s the why behind all this? What are you trying to pull off? Cause on that night that you hate that you do it, it helps you remember why you do it. That overall point becauseGetting access to the real estate market in America is how you generate wealth over the long term. And it’s like you’re saying, if you can get someone else to pay your mortgage for you or even part of it, now you’re just sitting on your ATM. Ultimately, as it appreciates and keeps growing, however you decide to use it, like that’s the most beneficial part of owning the property.
Danielle Anderson (14:50)
Mm-hmm.Well, I think what I love about all of these strategies, literally they can start with 3 % down if you haven’t owned a home before. So the barrier to entry is less than what people think. And then on top of that, so I work in eight different states, Colorado, Tennessee, Alabama, Texas, Arizona, Ohio, Florida. But my team works in every state except for New York.
Every single state that we operate, which is 49, has down payment assistance programs. So not only can you, if you just did a regular conventional loan, you could do 3%, or if you have to go FHA, you could do 3.5%. You pair that with down payment assistance, and you literally can get into a home in most states,
now I’m gonna put a little asterisk of like the lending guidelines, and like you have to qualify and everything, and there might be income limits, but you could get into a home for $1,000 out of pocket.
And I think there’s such a misconception that you need 20 % down or more money. And that’s why I love doing what I do is because it’s just like this light bulb moment after somebody has a 15 minute consult with me of like, Oh, I didn’t think it was possible. Now I do. and just trying to bridge that gap between one down payment and two affordability are the two largest barriers to entry for somebody buying the first house. And if we can offset down payment with down payment assistance and showing them how lower down options are.
possible and then also pair that with house hacking of like, my God, I can actually teach you how you can own a place and live in it for less than you’re paying in rent. The light bulbs just go off and people are like, wow, I think I can do this 10 years sooner than I thought it would be possible.
Micah Johnson (17:15)
Because for the right person, it’s a game changer. is, it, you don’t know what doors it’s going to open up. Like even look at yourself, you own multiple properties now, now you even get to lend. So we call that vertical integration where I’m from. And you’re doing the same thing and you’re able to like, that’s the beauty of real estate is that one thing, it doesn’t have to be your full-time thing. So often people just want to.Danielle Anderson (17:30)
Yep.Micah Johnson (17:41)
Especially in the world I live in, everybody’s trying to get to be a full-time investor. And that’s great if you want to do that. One thing I do like to showcase on the show, there are other ways to be a quote unquote real estate investor. And it’s here first, right? It’s in your mind first. It’s that story you tell yourself about what you’re doing first, because you’re right. I got into business as an agent in 2014 is how I got in. And so many people, there was a program I used around here. Heck, I used it myself where I got money back.at the closing table, no money down to buy a home. And when you realize, wait a second, if I’ll just quit telling myself how hard it is, because it’s not really that hard and be willing to go through the steps, who do I go learn from? You can do this. It doesn’t have to be a down the road thing. It really can be way closer than you think. Because it was, it’s life changing for me. When I figured it out, when I learned it, it truly is that thing. There’s nothing like having your house.
Danielle Anderson (18:12)
Yep.Mm-hmm.
Micah Johnson (18:40)
There’s there, it’s a powerful place to live in, like even just mentally and emotionally. I remember there was old Home Depot commercial where they talked about how kids are better when they live in a house that you actually own. There’s a stability they understand. So I love it. I’m all for it because it’s. I like people getting started. Like you’re saying, you never know what door it’s going to open by just here, get in your first place. What’s it going to look like? Here’s how it’s possible. So if you’re out there listening and watching.Danielle Anderson (18:40)
Yep.Mm-hmm.
Micah Johnson (19:09)
If you’re telling yourself you can’t, you’re the only one. Okay. Even if you know, you got issues starting to work with someone like Danielle, they were real estate team sport. You’re never going to do it alone. And even when you’re not quote unquote ready, if there’s things you still need to get sorted, you still work with a professional because they’re going to tell you what to do. I don’t know how many people I talked to, I got to fix my credit. Well, what’s that mean? What are you going to actually do?I’m not sure. Well, cause that’s just a dark black hole statement that doesn’t mean anything. Like there’s actual steps you can take that will do it. I know a guy can pop your credit score a hundred points in about three days. Okay. Like there’s a lot that can happen if you know what to do. Talk to the people who know what to do. I always say this education is always step one. Always. It’s not the offer. It’s not your loan application. It’s none of those things. It’s learning what’s actually possible.
Danielle Anderson (19:59)
Yep, absolutely.Micah Johnson (20:07)
then you can make an educated choice. You can decide, okay, I want the duplex version where I can rent this side, live in my own side. Now I own a multifamily property, small one, when I move to my next thing, perfect. And you just start stacking your inventory. there’s so many ways and I love that. I love how creative you are about it. Thanks for that.Danielle Anderson (20:12)
Mm-hmm.Yeah, I love that you said it starts with education. I wish that’s one thing people knew is start with a lender before you even know that you’re gonna buy. Because, like, my philosophy is if it’s not now, how?
So ending that conversation of if you’re not qualified for what you want right now, at least leaving you with an email that’s a roadmap of, our debt to income ratio is too high. That might mean that you need to take a second job for the next two years so I can use that income to boost your qualification. That might mean that we need six months of reserves. So you have a target of, hey, I need to save up $9,000 and then…
I’ll call Danielle again. It might mean that our credit score is at 540, we need it at 620, and I get you on a credit expert plan that I can do with a soft credit pull that doesn’t even impact your credit score, so that you have this roadmap of showing you how is it possible? And I think that’s such a great insight of like, yes, it starts with education and getting around the right team to help make it happen.
Micah Johnson (21:20)
Y’all, nobody just knows. Like we all walked, we all learned. And it’s funny, because the older we get, the more stupid we want to feel when we don’t learn something. Because when we learn it now, it always feels so obvious. But it’s always obvious once you know. Like get over that part of feeling dumb. Nobody cares. I feel dumb multiple times a day because I like to learn. And if I don’t know, then I couldn’t know. And then when someone tells me, it’s like,Danielle Anderson (21:28)
ThanksYep.
Micah Johnson (21:47)
Well, that’s obvious. I can’t believe I didn’t see that. But if you wouldn’t have shown it to me, I still never would have seen it. So thank you very much. Right. Like this is a learning game. And I love the fact that you’re the type of lender that does that. I ran into many in the business that wouldn’t, if you weren’t ready now, they didn’t care. And I would never keep working with them because the best know one, I want to work with you whenever I still need to write loans two years from now. It’s not like I’m going to do something different, but at the same time,Danielle Anderson (21:51)
YeahYep.
Micah Johnson (22:15)
I’m just spending this time with you to show you this is what’s possible. And in my opinion, y’all, those folks are worth their weight in gold. Those are who you wanna work with. So Danielle, if someone is interested in reaching out to you because you have tremendous reach around America here, what’s the best way for them to find you and learn more about what you have going on?Danielle Anderson (22:34)
I would say my website, www.househackplaybook.com is a great start and resource and there’s a button that says book a free 15 minute consult. And then I’m also very active on Instagram at danielleanderson_loansMicah Johnson (22:49)
Excellent. We’ll make sure Danielle’s links are in the show notes for you. So please click on there, book that call with her, follow on her IG. I always say that when you meet true professionals, see what they’re doing. They’re going to show you the best kept secrets you thought you could never know. So again, Danielle, thanks for being on today. I appreciate your time. I think we need more folks out there doing it like you’re doing it.And for everybody watching and listening, appreciate you. If you got value out of today’s episode, please like this episode, share it with someone else you think can get value out of it. Maybe it’s time for them to get in the game too. As always, please don’t forget to subscribe to our podcast. We appreciate every single one of you that follows along with us. We’ve got more conversations coming up with operators just like Danielle out there building a real business in the industry. Thanks so much. We’ll see you on the next episode.
Danielle Anderson (23:37)
Thank you.
